Just Transition Fund: A green blueprint for a resilient recovery in Europe

Manolis Kefalogiannis

Europe is now considering how best to structure its recovery from the deep health, social and economic crisis stemming from the COVID-19 pandemic.

If we can take one positive from the pandemic, it should be that we learn from the way COVID-19 has exposed flaws in present systems.

Europe’s recovery plan should address the social impacts of the present crisis by placing the European Green Deal at its heart, creating jobs and to this end supporting a just transition and mobilising green investment in line with the European net zero emissions goals.

This is our ambitious commitment: to make Europe the first climate-neutral continent while ensuring that the transition to this new green growth model is just and fair for all EU citizens and territories.

Since the climate policies enacted by the EU will have an uneven impact on European regions, communities, sectors and workers, they need to be accompanied by social and economic policies to ensure that no one is left behind.

Thus, the aim of just transition is to provide support to territories facing serious socioeconomic challenges as a result of the transition to climate neutrality. This initiative is composed of three pillars: a new Just Transition Fund (JTF), the use of a fraction of InvestEU financing for climate objectives and the creation of a public-sector loan facility at the European Investment Bank, partly guaranteed by the EU budget.

Following the adoption of the opinions of both the Council and European Parliament, the opportunity remains to improve the JTF through our crucial trilogues. These improvements could be achieved by refocusing the JTF onensuringsufficient economic and social support to the countries, regions, industrial sectors, technologies, workers and consumers that need it the most. We can still further amend it to better respond to the urgent need for just transition policies in the challenging context of the post-COVID-19 recovery.

"This is our ambitious commitment: to make Europe the first climate-neutral continent while ensuring that the transition to this new green growth model is just and fair for all EU citizens and territories"

The JTF shouldprioritisethe areas that need support the most, including highly carbon-intensive regions and those with a gross domestic product per capita below the EU average, such as the islands and outermost regions.

The allocation–performance linkage should ensure that the different starting points are taken into account and should avoid disadvantaging countries and projects; this is why the Green Rewarding Mechanism should be preserved. The JTF should be purpose driven towards helping those areas that need assistance the most.

We can still actively promote a quick phasing out of coal, by bridging natural resources such as natural gas, where necessary, and by putting in place a just transition scheme that would guarantee the social welfare of coal miners who stand to lose their jobs and aid the socioeconomic transformation of Europe’s coal regions.

In line with our political ambition, businesses are already preparing to deliver on the just transition target of a net zero emissions European economy by 2050, recognising that climate action is well aligned with building new industries, delivering better health and creating pleasant places to live.

On the other hand, European governments have already started to work with businesses to deliver a stronger, collaborative just transition that repairs the social and economic damage caused by coronavirus while simultaneously addressing deeper climate and environmental issues.

The JTF should be fit for the challenges ahead and the amount of support provided should be substantial.

The scale and intention of the JTF is revolutionary and the EU must not lose sight of how far it has already come.

We should remember that making the right decisions now can help to create a fairer and secure environment for all our regions in the future.