The 7.5 billion euros revealed today in a leak of the EU’s proposed Just Transition Mechanism can lead a sustainable and economically-fair move away from fossil fuels in Europe’s carbon-dependent regions, but only if local stakeholders are involved in planning the transformation and the funding is consistent with climate targets.
Initially proposed as a Fund in November 2018 by parliamentarians from central and eastern Europe, the Just Transition Mechanism will also include a dedicated scheme under InvestEU and a public sector loan facility with the European Investment Bank to mobilise additional investments to the target regions concerned.
Bankwatch welcomes that the proposed 7.5 billion euro Fund will be available only for projects that are low-carbon and climate-resilient, including re-skilling programmes for miners, jobs in new economic sectors and energy-efficient housing and territorial transition plans, and that it explicitly excludes any support for fossil fuels. However, it is disappointing that the InvestEU scheme leaves a door open for the financing of gas infrastructure.
In order to access the Mechanism, countries need to propose one or more territorial just transition plans, which need to be consistent with National Energy and Climate Plans (NECPs). But especially in central and eastern Europe, the NECPs are lacking ambition and many have insufficient provisions to lead to the EU 2050 carbon neutrality target.
Examples from central Europe show that a just transition is possible provided that locals own the planning and big polluters do not receive back door subsidies. In July 2019, the Slovak government approved a plan for the redevelopment of Upper Nitra coal region, which was created based on inputs from the local community provided through focus groups since 2018.
The Action Plan also rejected a new mine at the Novaky coal complex, which private company Hornonitrianske bane Prievidza (HBP) was intent on opening. Locals’ inputs have resulted in a plan that aims for “developing economic activities in symbiosis with a clean environment”.
Raphael Hanteaux, EU policy officer with CEE Bankwatch Network, said, “We can’t afford the money from the Mechanism ending up in the wrong pockets. Clear and strict criteria must be established and adhered to so as to ensure that this money is used for the purpose for which it is intended: to alleviate the economic and social impacts of the transition away from fossil fuels for the most vulnerable communities.”
Juraj Melichar, national coordinator for Slovakia with CEE Bankwatch Network, said, “The just transition will be a difficult process, and each region faces very different challenges and opportunities. It is imperative to involve local communities and develop tailor-made solutions to region’s specific needs. As we’ve seen in Slovakia, a just transition begins at the local level, so the Mechanism must give communities the means to be involved in the process by building their capacities and providing them with the necessary technical assistance to apply and manage EU funds.”