EU pledges €40b for ‘just transition’ from fossil fuels

BRUSSELS, May 27 — The European Commission has increased five-fold its proposed European Union fund to wean carbon-intensive regions off fossil fuels, with fresh cash from a new recovery fund to help Europe’s ailing economies rebound after the coronavirus pandemic.

Countries are already clamouring for a slice of the EU’s just transition fund, with 18 member states preparing to apply for support to wind down coal sectors, retrain workers and help carbon-heavy businesses pivot to greener activities.

The Commission today confirmed how much money will be on offer – €40 billion, made up of €30 billion from an EU coronavirus recovery fund and €10 billion from the bloc’s budget for 2021-27.

This is in 2018 prices, the Commission said, and would be worth roughly €44 billion in current prices. Its proposal needs approval from member states and EU lawmakers.

The proposal is more than five times bigger than the €7.5 billion just transition fund – in 2018 prices – the EU executive proposed in January before it overhauled its budget proposals amid the pandemic.

When combined with 10 billion in loans from the European Investment Bank, the fund aims to trigger a total of at least €150 billion in just transition investments over 2021-27, including private capital, the Commission said.

It did not specify how the cash will be split between countries.

Under the Commission’s previous proposal, all EU countries could apply for funds, but regions whose economies and jobs depend on polluting industries had priority – such as coal mines in Poland or Estonia’s shale oil producers.

The fund aims to convince coal-heavy countries that the Commission’s target to decarbonise the EU economy by 2050 is achievable.

Poland, which employs roughly half of the 237,000 people working in the EU coal industry, has not yet committed to the 2050 climate goal. — Reuters