EU institutions caught in crossfire over Just Transition Fund

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The European Parliament will vote on Tuesday and Wednesday (15-16 September) on the Just Transition Fund. But this mechanism, initially designed to finance the social aspects of the transition to a low-carbon economy, has now been extended to finance gas projects. EURACTIV France reports.

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The European Parliament will vote on Tuesday and Wednesday (15-16 September) on the Just Transition Fund. But this mechanism, initially designed to finance the social aspects of the transition to a low-carbon economy, has now been extended to finance gas projects. EURACTIV France reports.

The €17.5 billion fund is designed to support the EU’s most fossil fuel-dependent regions in their transition to a low-carbon economy, while limiting the economic and social impacts.

But while the European Commission and EU member states have spoken out in support of excluding fossil fuels from the Just Transition Fund, a majority in the European Parliament has come to favour financing gas projects through this mechanism.

For green campaigners at France’s Climate Action Network, this is pure nonsense. In a statement, they called on MEPs to “get out of the inconsistency” and refuse to “vote in favour of a more ambitious climate target for 2030” while at the same time allowing the fund to finance gas projects.

According to Ludovic Voet, confederal secretary of the European Trade Union Confederation (ETUC), the downsizing of the amount allocated to the Just Transition Fund forces a narrower scope of action, and a study of projects on case-by-case basis.

“The amount allocated to the Just Transition Fund has gone from €40 billion to €17.5 billion” under an EU budget deal struck by European leaders in July, Voet pointed out. “Under such conditions, it is extremely difficult to carry out an energy transition and to finance social measures at the same time,” the trade unionist told EURACTIV France.

He cited the example of the Coal Commission set up by Berlin precisely to finance the transition to a low-carbon economy in the country’s mining regions, which has a budget of €40 billion.

“Germany can afford to make that much money available. But this is not necessarily the case for less wealthy countries such as Poland, Bulgaria or Greece. Because there is a challenge to redistribute resources to reduce inequalities between the east and west of Europe, as well as between the north and south,” he said.

Spanish and German examples

For Voet, the case of Germany shows how difficult it is to interweave social and climate policy. “Yes, the country has decided to phase-out coal by 2038, but it was a decision that was taken in consultation with the various stakeholders,” he stressed.

He insisted that projects must indeed be conditional on the objectives set by the Paris Climate Agreement and the EU’s aim to become carbon neutral by 2050.

“But they must be carried out with the participation of the employees concerned,” the trade unionist added, citing Spain as another European example.

Madrid adopted a plan in November 2018 to have 70% of its energy mix dedicated to renewable energies by 2030 and 100% by 2050.

Spain’s roadmap centres on an agreement between the government and the unions to move away from coal, which includes early retirement schemes, training and investment programmes in the most vulnerable regions.

Clean technologies, which include the production of energy from renewable sources such as wind, solar and geothermal energy, but also the energy renovation of buildings and the circular economy, are now in the spotlight.

For instance, by investing in clean energy, up to 315,000 jobs can be created by 2030, a number that could rise to 460,000 by 2050, according to a report published by the European Commission’s Joint Research Centre (JCR).

Just Transition Fund could also be used for gas projects

The concept of a just transition has come a long way and is now included in the preamble of the Paris Climate Agreement adopted in 2015, which states that the implementation of climate policies should not come at the expense of workers.

The commitment to include a social dimension in the ecological transition was then reaffirmed in a ministerial declaration during the COP24 chaired in 2018 by Poland, whose economy remains highly dependent on coal.

And it was notably in response to Poland’s strong reluctance towards the EU’s objective of achieving carbon neutrality by 2050 that the European Commission announced the creation of the Just Transition Fund at the start of the year.

The fund aims to provide social guarantees to ensure that the move towards a low-carbon economy is not to the detriment of the most vulnerable regions.

In July, the European Parliament’s Committee on Regional Development (REGI) adopted its position on the proposed regulation of the Just Transition Fund.

The 27 MEPs on the committee – including all members of the liberal Renew and socialist S&D groups that voted in favour of the Green Deal – not only backed an increase of the fund’s current amount but also voted to allow gas projects to be financed by the Just Transition Fund.

The Parliament will now adopt its position on the basis of the report adopted by the regional committee.

[Edited by Zoran Radosavljevic and Frédéric Simon]


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