The European Parliament and the German Presidency of the EU Council reached an agreement late on Wednesday 9 December on the regulation for the Just Transition Fund (JTF) that excludes gas investments but maintains the European Parliament’s watered-down call for a green reward mechanism. The Fund will be endowed with €17.5 billion.
The co-legislators agreed to exclude gas investments from the fund, thus rejecting the position Parliament voted for in plenary (see EUROPE 12561/11).
Finally, knowing Parliament’s fragile position (The amendment allowing gas investments was passed by 10 votes in plenary session), REGI Committee negotiators reinstated the rejection of gas investments, while also putting an end to gas investments after 2025 within the European Regional Development Fund (ERDF) and the Cohesion Fund (CF) (see EUROPE 12619/22).
“It's a breakthrough: In the JTF, we've totally taken gas out. On the ERDF, one must employ a contrario reasoning. We forget that the ERDF authorised investments in gas. And this is the first time that we have an extremely consequential limit and an end to all gas funding”, REGI committee chair Younous Omarjee (GUE/NGL, France) told EUROPE.
In addition, the European Parliament succeeded in maintaining its proposal for a green reward mechanism for the Member States that are most virtuous in combating greenhouse gas emissions. The philosophy of the mechanism advocated by Parliament has been preserved, but its operation and method of financing have been modified.
The mechanism will be operational in early 2025 – the time it will take to aggregate the data, but also to obtain additional funding from additional financial resources that have yet to be determined. “This could be an extension of Next Generation EU, for example”, said one source.
It was difficult for the EU Council to accept that part of the allocated financial envelope (18% in Parliament’s proposal - see EUROPE 12609/17) would be retained without knowing how this reserve of money will be distributed afterwards, we are told. Moreover, “this must not open the door to offshoring”, Omarjee added, suspecting that Member States and regions might be tempted to relocate certain production in order to export their emissions.
At the instigation of Parliament, the Fund’s scope has been strengthened with regard to employment and the social dimension. “We must not lose sight of the JTF’s vocation: it is first and foremost an instrument for tempering the impact of the environmental transition. In social matters, there are a lot of things that are planned. The economic and social dimension is at the heart of the Fund”, continued the MEP. Thus, the co-legislators insisted on the need to ensure that the Fund not only helps create jobs, but also assists micro-enterprises in addition to start-ups, universities, and public research institutions.
Finally, the co-legislators agreed that Member States should take account of islands and outermost regions (ORs) in their national just transition plans. Directly emphasising island specificity in an article sets a precedent, a source tells us.
The European Parliament had a freer hand for these negotiations than for the other funds because of the option to continue negotiations under the Portuguese Presidency of the EU Council without having an immediate impact on funding for regional projects.
The REGI Committee has thus concluded all the interinstitutional negotiations on the post-2020 legislative dossiers for which it is responsible: React-EU (see EUROPE 12604/2), the umbrella regulation (see EUROPE 12614/11), the ERDF and the Cohesion Fund (see EUROPE 12619/22), Interreg (see EUROPE 12615/16), and the Just Transition Fund. “We have succeeded in concluding the entire cohesion package in addition to the new REACT and JTF regulations”, the chair of the REGI Committee was pleased to report, despite the doggedness of the German Presidency, which had to be reminded that “negotiating is not submitting”, he said. (Original version in French by Pascal Hansens)
*The article was modified on 11.12.2020