EU strides forward on Just Transition, but risks stumbling on fossil fuels
Posted on 14 January 2020
It is not a ‘transition’ without a deadline for getting climate neutral.The path to a climate neutral Europe became a little easier today, with the European Commission’s proposal for a fund to help regions reach climate neutrality.
The ‘just transition mechanism’ aims to mobilise up to €100 billion to support workers and their communities in regions whose economies are based on carbon-intensive activities, like coal mining.
The mechanism requires regional just transition plans to be compatible with EU climate and energy goals. This means Member States have no excuse not to sign up for climate neutrality.
However, the mechanism is not clear enough on the need for regional plans to include timelines for the phase out of fossil fuels, including a phase-out date for coal of 2030 or earlier. MEPs and EU Member States must step-up its ambition to deliver a truly just transition.
Katie Treadwell, Energy Policy Officer at WWF European Policy Office said:
“A climate neutral Europe needs everyone to play their part. The proposed just transition mechanism is an important step towards making that happen. But a ‘just transition’ is not ‘just’ if regions are locked into unviable fossil fuels. It is not a ‘transition’ if there is no deadline for getting climate neutral. MEPs and EU Member States must improve the proposal so that regions show how and by when they will get free from gas, oil and coal.”
WWF is calling for:
1. Territorial just transition plans to be underpinned by higher ambition and timelines for fossil fuel phase out
2. Transparency and the engagement of all stakeholders to be at the heart of the just transition mechanism
3. The just transition mechanism to exclude all fossil fuel investments from each of its three pillars (see below for more explanation of the pillars)
4. Since the just transition mechanism alone will not be enough to deliver a just transition, Member States must complement it with national policy and financial support
The European Commission also published today a plan for unlocking €1 trillion of sustainable investments over ten years. The plan contains no new money and is little more than pretty packaging of an empty box in WWF’s view. See WWF’s reaction.
WWF welcomes the proposal as a vital step forward in EU just transition policy. However, the mechanism can still be improved and Member States must complement it with their own resources. The co-legislators must now ensure there is sufficient ambition and that the mechanism is watertight to any fossil fuel investment.
Structure of the mechanism
The mechanism consists of three pillars: a just transition fund for grants to regions in transition, an InvestEU Guarantee to leverage private investment (because it lowers investment risk) and an EIB Public Sector Loan Facility to leverage public sector investment for the just transition.
Funding will be dependent on ‘territorial just transition plans’ to be developed at the smallest EU regional level (‘NUTS 3 level) – one which is much more targeted than used in other cohesion policy funds and which reflects the necessity of bespoke solutions in specific regions.
The mechanism will also include the creation of a ‘Just Transition Platform’. The new Platform will be able to provide technical assistance to the regions developing territorial just transition plans, in addition to facilitating the exchange of experience and the sharing of information. This process will build on the lessons from the coal platform and in this context, WWF urges the Commission and Member States to ensure transparency and the involvement of all stakeholders throughout the transition process.
WWF’s recommendations and analysis in more detail:
- Territorial Just Transition Plans must be underpinned by higher ambition and timelines for fossil fuel phase out
WWF welcomes the conditionality of EU just transition support on the approval of the plans. However, alignment with the National Energy and Climate Plans and current 2030 EU targets alone is not enough. To deliver the step change needed, regions must be able to go further. Therefore the plans must also contain timelines for fossil fuel phase-out, including a 2030 phase out date or earlier for coal.
- Transparency and the engagement of all stakeholders should be at the heart of the just transition mechanism
The new Just Transition Platform must also give transparency the utmost importance. Building on the lessons from the coal platform and the country team meetings, WWF urges the Commission and the Member States to ensure transparency and the involvement of all stakeholders throughout the transition process. WWF recommends the Seven Golden Rules for Just Transition Planning as a basis for designing formal structures.
The Member States will propose regions to receive the fund following dialogue with the Commission. The fund should prioritise coal regions, but be open to support other regions which face challenges in the transition. The process of approval and of region selection should also be open and transparent.
- The Just Transition Mechanism must exclude all fossil fuel investments
However, we note that investments in all fossil fuels should be excluded from all three pillars of the just transition mechanism.It is very concerning that the InvestEU element of the new proposal includes the explicit possibility to finance gas projects.
WWF strongly welcomes the recognition of the European Council’s commitment to climate neutrality by 2050, but notes that fossil fuel investment, including in natural gas infrastructure, is incompatible with this goal. Sustainable economic diversification should be at the heart of all territorial just transition plans
- The Mechanism alone will not be enough to deliver a just transition
Member States must complement EU support for a just transition with national funds and should create enabling policy environments for investors to support the transition. WWF’s recent analysis of Emissions Trading System revenue spending illustrates how Member States could make better use of this resource to achieve EU climate and energy goals.
WWF welcomes that the just transition mechanism will be additional to the existing 25% climate mainstreaming proposed in the 2021-2027 Multiannual Financial Framework Proposal, but notes this should be higher.
Energy Policy Officer
WWF European Policy Office
+32 470 73 57 48
WWF European Policy Office
+32 473 573 137