Shaping a truly just Transition Fund

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The current proposal for a Just Transition Fund fails to provide sufficient support to Member States faced with the biggest challenge in the transformation towards carbon neutrality. This is the main finding of Eurelectric latest paper on the topic.

The proposed “fresh money” envelope of € 7.5 billion is insufficient to properly address the transformation needs of our sector and to limit the distributional effects of a fast-speed energy transition. In addition, the suggested mandatory “transferring mechanism” risks to lead to counterproductive effects and discourage countries to apply for the fund altogether as it would impose on Member States to top on with €1.5 to €3 every single euro received from the Fund.

Policymakers must therefore increase the envelope of the fund and make sure not to limit the allocation per Member State at € 2 billion. It is also important to apply the same aid intensity rules as the European Investment Bank’s Energy Transition Package. This means financing up to 75% of the needs.

Additionally, supported activities should always be considered in light of the following criteria:

  • Contributing to the creation of new jobs;
  • Contributing to CO2 emissions reductions;
  • Contributing to maintaining security of supply;
  • Contributing to the circular economy, air quality, site restauration, upskilling and reskilling of workers.

Last but not least, the Fund should prioritise highly carbon-intensive regions, notably those reliant on coal mining and having a GDP per capita below the EU average, but also the outermost regions or islands that are often reliant on oil imports.

Read the full position paper: Shaping a Just Transition Fund fit for purpose