The transition towards climate neutrality will provide opportunities for and challenge regions and sectors differently. Some will see more immediate opportunities, some will face more challenges than others, and not all will have the same capacity to deal with the costs of adjusting to the climate transition. To help the most vulnerable regions deal with the socio-economic impacts of the transition, the Commission proposed in January 2020 a €100 billion Just Transition Mechanism consisting of three pillars: a Just Transition Fund, a just transition scheme under InvestEU and a public sector loan facility. The Mechanism is part of the €1 trillion European Green Deal investment Plan proposed in January.
In light of the coronavirus crisis, not only the need for a sustainable, green recovery has become even more pressing, but also the need to provide support to the most vulnerable regions. This is why the European Commission wants to reinforce the Just Transition Mechanism as part of its crisis response mechanism and in its new proposal for the next long-term EU budget. The overall budget of the Just Transition Fund will be increased to €40 billion and the just transition scheme under InvestEU will be reinforced. Today, the Commission also presents its proposal for a public sector loan facility, which will mobilise between €25 and €30 billion. In total, the Just Transition Mechanism is now expected to mobilise at least €150 billion of public and private investment.
What is the top-up for the Just Transition Fund and what will it be used for?
On top of the proposed €7.5 billion, the Commission is proposing a substantial additional funding, of €2.5 billion under the next long-term EU budget and €30 billion from Next Generation EU. This brings the total for the Just Transition Fund to €40 billion.
The funding will be used to alleviate the socio-economic impacts of the green transition in the regions most affected, by for example supporting the re-skilling of workers, helping SMEs to create new economic opportunities, and overall diversifying economic activity, investing in the future of the most affected regions.