The outlines of the future Just Transition Fund (or Just Transition Mechanism), which will be presented by the European Commission by 8 January 2020, are gradually taking shape, according to documents consulted by EUROPE on Monday 9 December. These are provisional proposals and the amounts envisaged may undergo further change.
In essence, according to these documents, the European Commission forecasts a so-called "5+5" budget scenario: a €5 billion budget from the next multiannual financial framework 2021-2027 for the Just Transition Fund and €5 billion from the European Regional Development Fund and the European Social Fund plus.
The European Commission is considering a level of national co-financing of around €5 billion. National co-financing rates will be 30% for the least developed regions, 45% for the transition regions and 60% for the developed regions.
In addition, the institution is proposing a transversal financial product under the InvestEU Fund, which, thanks to a specific guarantee of €1.5 billion, could mobilise investments of around €20 billion to support the just transition goals, i.e a potential total of €35 billion.
There will therefore be a drain on cohesion policy funding, which is already being undermined by the recent proposals from the Finnish Presidency of the Council (see EUROPE 12384/10), which will greatly displease the European Parliament and local and regional elected representatives (see EUROPE 12343/18).
The overall financial envelope will remain unchanged, according to the Commission, which plans to integrate the Fund into the Cohesion and Values budget line of the future multiannual financial framework. But the Commission suggests using potential new resources from carbon emission taxation through the ETS system.
2/3 of eligible Member States
One of the important points to note is that the eligibility criteria for this fund will cover two main types of regions. Regions where a significant number of people are employed in fossil fuel production (coal and lignite mining, peat and shale oil) and which will be seriously affected by the transition and/or regions which are heavily dependent on energy-intensive industries using fossil fuels, and whose greenhouse gas emissions are well above the EU average.
On the basis of these two criteria, about 2/3 of the EU Member States would be covered by the Fair Transition Fund, "which would ensure sufficient concentration and impact of financial resources", according to the European Commission.
€100 billion?
The investment terms are becoming clearer. But the amounts could still change significantly. On Wednesday 4 December, President von der Leyen announced much larger sums, up to €100 billion, with the support of the European Investment Bank.
The presentation of the Fund or Mechanism has been postponed until after the winter break and is scheduled for Wednesday, January 8. (Original version in French by Pascal Hansens)