The council of EU energy ministers has endorsed an agreement hammered out with the European Parliament for a €17.5 billion Just Transition Fund (JTF) within the 2021-2027 Multiannual Financial Framework (MFF), the EU’s seven-year budget.
The council’s decision was announced today (Wednesday, December 16), and is being described by the council as “a major step on the path towards an effective and fair green transition that will lessen the costs for those communities across Europe that are heavily dependent on fossil fuels”.
The agreement which the council endorsed today was negotiated between Germany (which currently holds the presidency of the EU) and the European Parliament.
The JTF is an affirmation of our solidarity and political will as a union to tackle climate change together.
“It will help to reconcile economy and ecology. We cannot implement the European Green Deal without mitigating the consequences for those most affected by the decarbonisation of our economy,” said Pater Altmaier, the German minister for economic affairs and energy.
The JTF will see member states develop Just Transition plans for territories facing “serious socio-economic challenges” as a result of the restructuring to achieve the EU’s 2030 target of reducing greenhouse gas emissions by 55% and having a “climate-neutral economy” by 2050.
The fund is aimed at regions that will be forced to phase out the production and use of coal, lignite, peat and oil shale, or to transform their carbon-intensive industries.
The resources will come from the 2021-2027 MFF (€7.5 billion) and the Next Generation EU instrument (€10 billion spread over three years).
The JTF is set to be aimed at activities like:
- Investment in small and medium enterprises (SMEs), including microenterprises and start-ups;
- Creation of new firms;
- Research and innovation, including by universities and public research institutions;
- Affordable clean energy;
- Decarbonisation of local transport;
- Digital innovation and connectivity;
- Retraining of workers and job seekers.
The council stressed that the JTF “will not support any investment related to fossil fuels, including natural gas”.
The text of the JTF regulation will be finalised in early 2021, at which time Portugal will have taken over the EU presidency.