Decoding the JTF: What is the Just Transition Fund ?
As the first pillar of the Just Transition Mechanism, the Just Transition Fund (FTJ) is a new key financial instrument of the EU Green Pact that responds to the strategy “a transition where no one is left behind“.
The Just Transition Mechanism has been set up to cope the social and economic consequences of the transition to a climate neutral economy. It pays particular attention to those regions, sectors and workers who face the greatest challenges. It is divided into three pillars:
The JTF is therefore the first pillar of this mechanism which aims to support the regions and communities most affected by the transition to a greener and more sustainable economy in order to achieve the objective of climate neutrality in 2050.
Under discussion from December 2019, the FTJ was established in June 2021. The FTJ is intended to support the regions and communities most affected by the energy transition, in particular those heavily dependent on fossil industries and regions where jobs are threatened by the transition. The main objective of the fund is therefore to mitigate the socio-economic costs and reduce regional disparities induced by the climate transition.
The FTJ is an instrument that :
The Just Transition Fund is open to:
It is intended to benefit those territories most affected by the transition, such as territories heavily dependent on fossil fuels (notably coal, lignite, peat, oil shale, heavy oil and diesel) or greenhouse gas intensive industrial activities (such as steel, chemicals, cement or others).
The JTF therefore focuses on a limited number of NUTS3 (Nomenclature of Territorial Units for Statistics) regions or parts thereof. Their eligibility for JTF funding is determined by a selection process conducted through a dialogue between local authorities and the Commission.
The JTF is fully in line with regional cohesion policy and therefore follows the rules of shared management between the European Union and the States.
EU Member States are required to submit Territorial Just Transition Plans (TJTPs) that identify the regions and sectors that are most affected by the energy transition. The identification of these territories is based on the analysis provided in the framework of the Commission’s proposal for priority regions and sectors in terms of eligibility within Annex D of the 2020 European Semester country reports. As an indication, Germany has the largest number of eligible territories (18), followed by Poland (9) and Spain (8).
These TJTPs are then assessed by the European Commission and the regions that fulfil the eligibility criteria are selected to receive funding from the Just Transition Fund and benefit from the specific Just Transition scheme under InvestEU and the EIB’s Public Sector Lending Facility.
The JTF subsidises projects according to the category of the region in which they are located:
To be eligible for JTF funding, investments in the following activities and themes must be supported
The fund is not open to projects related to nuclear power plants, tobacco activities and investments in fossil fuel activities. The fund also excludes support for companies in difficulty. Furthermore, Member States that have not committed to the objective of achieving a climate-neutral Union will only receive 50% of the annual allocations.
The financing of the Just Transition Fund is 17.5 billion (at 2018 prices) of which 10 billion comes from the NextGenerationEU.
This fund follows the rules of shared management. Consequently, it is managed nationally between the State and the regional managing authorities.
The national managing authorities are responsible for steering, managing and examining applications for aid if their territory has been recognised as eligible by the Commission.
In France, the national programme for the Just Transition Fund (FTJ) was validated by the European Commission on 30 November 2022. This programme is consistent with the PTTJ defined by the State and the regions eligible for the FTJ, as well as with the various FTJ components of the regional programmes concerned.
Elodie Roure – Jasha Menzel