€17.5 Billion Just Transition Fund Adopted by European Council
The European Council announced today the adoption of regulation to establish the Just Transition Fund, a €17.5 billion fund aimed at ensuring that the EU’s shift to a net zero economy over the coming decades is fair and inclusive, particularly concerning its impact on communities that are heavily dependent on fossil fuels or greenhouse gas-intensive industries.
With the EC’s adoption of the regulation, it will enter into force following its upcoming publication in the Official Journal of the European Union.
Acknowledging the potential economic disruption involved in achieving the energy transition goals necessary to limit the impact of climate change, the Paris Agreement embedded the concept of a Just Transition, aiming to address the social implications of delivering a net zero economy world. The agreement included a clause:
“Taking into account the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities.”
According to the European Council, a main emphasis of the fund will be to help people adapt to new employment opportunities through investment in training and retraining of workers and job seekers, job-search assistance as well as measures for social inclusion. The fund will support small and medium-sized enterprises (SMEs), including start-ups, and the creation of new firms.
Originally targeted for €40 billion, the Just Transition Fund’s proposed size was reduced during European Union negotiations in July 2020 to launch a €750 billion COVID-19 recovery fund.
Nelson de Souza, Portuguese Minister for Planning, Council presidency, said:
“The success of the European Green Deal rests on us mitigating the consequences for those most affected by the decarbonisation of the economy. The Just Transition Fund will provide much needed support to companies and workers at local level, so that we can combat climate change together as a Union, leaving no one behind.”