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Parliament requests more support for regions to make energy transition a success

MEPs are ready to start negotiations with the Council on setting up the Just Transition Fund to mitigate the social impact of greening the economy.

  • Parliament broadened scope of the new Just Transition Fund (JTF)
  • Social cohesion is a guiding principle for providing support under the JTF
  • Particular focus on least developed regions, outermost regions, islands
  • European Council must increase level of resources to meet actual needs

JTF will provide support to people, the economy and the environment ©Pkproject/Adobe Stock

JTF will provide support to people, the economy and the environment ©Pkproject/Adobe Stock 

On Wednesday 16 September, MEPs adopted Parliament’s position on the Commission proposal on the JTF with 417 votes in favour, 141 against and 138 abstentions.

Parliament insisted on a substantial increase in JTF resources from the EU budget for 2021-2027 (EUR 25 billion in 2018 prices compared to EUR 11 billion proposed by the Commission and the decrease to EUR 7,5 billion agreed by the European Council). This amount should be supplemented by EUR 32 billion in current prices, as proposed under the EU Recovery Instrument.

Moreover, MEPs confirmed key provisions outlined in the draft recommendations by the Regional Development Committee:

  • Providing support to people, the economy and the environment,
  • Creation of a “Green Rewarding Mechanism”, allowing 18% of the total JTF resources to be allocated to member states that reduce their greenhouse gas emissions more quickly than others,
  • A share of 1% of the total amount will be allocated for islands, and 1% for the outermost regions,
  • A co-financing rate of up to 85% of costs for eligible projects across the EU,
  • Possibility to transfer resources from other cohesion funds on a voluntary basis,
  • Broadening the scope to include microenterprises, sustainable tourism, social infrastructure, universities and public research institutions, energy storage technologies, low-emission district heating, smart and sustainable mobility, digital innovation, including digital and precision farming, projects fighting energy poverty, as well as culture, education and community building,
  • A derogation for investments in activities related to natural gas, for regions heavily reliant on the extraction and combustion of coal, lignite, oil shale or peat, if they qualify as “environmentally sustainable” in accordance with the Taxonomy Regulation and comply with six additional cumulative conditions,

In addition, only 50% of the national allocation will be available for countries which have not yet committed to a 2050 national target for climate neutrality, until such a target is adopted.

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