The European Commission has presented a Just Transition Mechanism, which will be set up to help coal-dependent regions of the EU, to transition their resources into different areas of economic activity.
In December 2019 all EU member states apart from Poland agreed on the target of reaching carbon neutrality by 2050. Central European countries such as Poland, Hungary, the Czech Republic and Estonia demanded a transition fund. Despite the latter four countries eventually agreeing, Poland remained reluctant.
The proposal to reduce greenhouse gasses to zero by 2050 would mean not only closing coal-fueled power plants, but also planting forests or storing carbon underground.
The Sustainable Europe Investment Plan presented by the head of the EC will support the efforts of the December agreement and lead to at least EUR 1 trillion green investments. Within its framework will be the Just Transition Mechanism.
Frans Timmermans, who has been put in charge of the project said that “the Just Transition Mechanism will help support those most affected by making investments more attractive and proposing a package of financial and practical support worth at least €100 billion. This is our pledge of solidarity and fairness.”
“We will support our people and our regions that need to make bigger efforts in this transformation, to make sure that we leave no one behind,” said the head of the European Commission, Ursula Von der Leyen.
Valdis Dombrovskis, the EC’s vice president for the economy, has underlined that the EU budget will be used to “leverage private funds for green projects across Europe and support the regions and people most affected by transition. Secondly, we will create the right regulatory incentives for green investments to thrive… The European Union was not built in a day. A Green Europe will not happen overnight. Putting sustainability at the heart of how we invest requires a change of mindset.”
The Just Transition Mechanism will provide support for regions that will need more effort to reach carbon neutrality over the period 2021-2027 in order to reduce the social impact of the transition. Reports suggest that Poland is to receive EUR 2 bn under the project, the largest amount among all member states supported by funding from the Just Transition Mechanism.
The European Commission will introduce a legislative proposal on the financing of Europe’s Green Deal in March 2020.