Published on November 28, 2018

Just Transition in the EU Budget

The European Parliament’s call for an extra EUR 4.8 billion for a Just Energy Transition Fund to support local communities in coal-heavy regions across Europe away from fossil fuels is commendable. But the proposed sum is a drop in the ocean in terms of the challenges that these places face.

Instead, the transformational potential of the entire EU Budget and in particular of Cohesion Policy must be unleashed. All the tools are in place for Cohesion Policy to catalyze such a just transition: with more than 70 times the resources of the proposed Fund, Cohesion Policy can lead a prosperous and carbon free Europe, provided that the political will is there among Member States to commit to a just transition and to set spending priorities accordingly for the next generation of EU funds.

This means not one cent should support the production, consumption or transportation of fossil fuels, and that the Budget needs a binding 40 per cent target for climate action across all spending, a strong link to the 2030 climate and energy framework and smart investments to clean up agriculture, transport, urban living and resource use.

Moreover establishing such a new fund is politically challenging: the proposal comes at a time when the Council is mostly debating cuts to the Budget, as evidenced again at this week’s General Affairs Council. So for the Commission now to add another legislative proposal to increase the size of the pot might be sisyphean.

Raphael Hanoteaux, EU Funds Policy Officer at CEE Bankwatch Network says: “The Parliament’s proposal is welcomed attention to a just transition but comes as too little, too late and fragments ongoing negotiations. Cohesion Policy is designed precisely to support regions in transition like those where the use of coal is heaviest and where major challenges exist in moving away from fossil fuels. Member States need to guarantee inclusive decision-making about how funds for a just transition are spent so that citizens and local authorities do not feel left behind.

The bottom line is that however any much-needed EU funding reaches these coal regions, it cannot be a blank check and should include strict conditions for a phase-out of coal.”

Markus Trilling, Finance and Subsidies Policy Coordinator at Climate Action Network (CAN) Europe says: “Europe must take urgent action to catalyze the just and zero-emission transition. But instead of asking for ever more funding, the Member States with regions that have historically depended on fossil fuels first need to get the policy framework right and stop supporting coal.”

“An early Christmas gift ahead of the COP in Katowice would need to be based on a clear commitment of all EU Member States to phase out fossil fuels in line with the findings of the latest IPCC report, which sets a timeline for this move during the next two decades.”

Photo by Jodi Hilton