A series of briefings provides key insights into the just transition strategies of eight countries in central and eastern Europe: Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Poland, Romania and Slovakia. Our analysis focuses on the 28 Territorial Just Transition Plans developed for regions within these countries receiving support from the Just Transition Fund. We examine not only the content of the plans, but also how their objectives specifically translate into the allocation of funds. We delve into the economic, environmental and social aspects of the plans and show how investments will be distributed across these policy areas.
Countries that have had their plans approved have advanced to the implementation phase, giving potential investors the opportunity to apply for funding based on priorities set out in the plans. In most countries, monitoring committees have been established to track the use of these funds.
Using the European Commission’s Cohesion Open Data Platform, we calculated the percentage of the total Just Transition Fund budget dedicated to each policy area. The overall goal is to shed light on how the countries and regions plan to spend their Just Transition Fund allocations.
The Just Transition Fund will be allocated between three policy categories: economic, environmental and social*. The economic category covers investments in employment, retraining and upskilling, small and medium-sized enterprises, business incubators, and large enterprises, including research, development and innovation. The environmental category covers investments in renewable energy sources and related infrastructure, energy communities, energy efficiency, land recultivation, waste management, mobility and climate adaptation. The social category covers social services, care for children and older people, research, development and innovation in the public sector, education and small-scale community initiatives.
However, funding priorities for the just transition vary significantly across the eight countries. For instance, while the Czech Republic demonstrates a balanced approach, allocating resources almost equally across economic, environmental and social policies, Romania’s unbalanced approach heavily prioritises economic policies to the detriment of environmental and social initiatives.
Overall, economic and environmental policies receive the most funding and are seen as top priorities by most countries. Regrettably, the social impacts of the just transition receive far less funding or are even ignored entirely, such as in Bulgaria, Hungary, Latvia and Romania.
Heavy investment in large enterprises can limit economic diversification at the local level, potentially locking economies like those of Estonia, Bulgaria and Hungary into their existing mono-industrial models. While Estonia compensates by prioritising investments in small and medium-sized enterprises, this is not the case in countries like Bulgaria and Slovakia. And although Romania has a strong focus on small and medium-sized enterprises, business development could be hindered if not paired with investments in skills development, research and education. Investments in energy policies vary significantly between countries. Even in Bulgaria and Slovakia, where investment in large enterprises is high, funds are being allocated towards renewable energy, waste management and energy efficiency.
The huge gap in funding for social measures (beyond job losses in transitioning industries) indicates that the broader social impacts of the just transition will likely require additional support from other funds, such as the European Social Fund or the Social Climate Fund. Similarly, nature restoration projects aimed at increasing biodiversity within former industrial areas may also need to seek funding from other cohesion policy funds or future dedicated environmental funds.
All eight countries chose to direct funds towards employment or retraining/upskilling. Poland, Bulgaria and Romania are the countries expected to be most affected by job losses in the coal industry so they will invest most in these types of interventions. One worrisome aspect of this allocation is the fact that in some countries most of this allocation will go towards the Reemployment Agencies, who can sometimes be inefficient.
Allocating funds aimed at covering the gaps created by job loss is crucial to a successful just transition. Still, this is only part of the story, as marginalized communities in these regions are in greater need of support aimed at improving their inclusion in the workforce. In most carbon intensive regions, workers in the polluting industry tend to be one of the more privileged social groups. In addition, employment schemes are frequently implemented in order to alleviate the economic impacts of such transitions and as economic stimulus measures.
Investments in renewable energy, infrastructure and energy efficiency dominate the environmental allocation from the Just Transition Fund. In Latvia, Hungary, Poland and Bulgaria, the recultivation of former mining sites and degraded land is a key priority. There are less significant allocations for mobility in Latvia, Poland and Romania, but circular economy and climate adaptation projects receive little or no attention. Investments in energy communities have been totally ignored, with some counties suggesting this area will be targeted using other funds. However, the complete absence of funding signals a lack of interest in the topic and makes tracking these investments difficult. It is also concerning that allocations for nature restoration and biodiversity, areas that demand the urgent attention of most countries, have been entirely overlooked.
For a detailed country-by-country analysis, check out the briefings:
🇧🇬 Following the money: Bulgaria
🇨🇿 Following the money: Czech Republic
🇪🇪 Following the money: Estonia
🇭🇺 Following the money: Hungary
🇱🇻 Following the money: Latvia
🇵🇱 Following the money: Poland
🇸🇰 Following the money: Slovakia
🇷🇴 Following the money: Romania
* Economic policies were defined as those directly aimed at the private sector or the improvement of employment conditions. Employment policies were also grouped under economic policies due to their primary benefits for companies or individuals. Economic policies encompass initiatives such as investments in small and medium-sized enterprises (SMEs), workforce retraining or upskilling, and investments in large businesses. Environmental policies were defined as those that aim to enhance the environment, including increasing renewable energy production and brownfield decontamination. Social policies were defined as those intended to improve the communal and public conditions of regions and specifically benefit large segments of the population. These policies cover investments in social and healthcare, education (excluding retraining or upskilling) and public research organisations.