Mechanism for a just transition

19.32 billion (including 10.87 from NGEU)

Reducing the socioeconomic impact of switching to “zero-emission” systems

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DG / Responsible Agencies: REGIO | CINEA

Potential beneficiaries

National and local authorities; businesses and start-ups in regions where the scale and impact of climate transition are greatest.

Description and objectives

The transition to climate neutrality will provide benefits and opportunities for the entire Union, but it will also present socioeconomic challenges and difficulties, especially for some regions and sectors. In addition, there are many disparities in terms of the levels of development and financial resources that member states and territories will be able to devote to the transition to climate neutrality.

Therefore, a coherent implementation framework and system is needed to alleviate the economic, environmental, and social costs of the transition to climate neutrality, especially in the most affected territories and sectors, to ensure that this key EU goal (set for 2050) is achieved effectively and equitably.

The Mechanism for a Just Transition is mainly established as part of the “European Green Deal” investment plan under the cohesion policy. It therefore shares the objectives of cohesion policy in the specific context of the transition to climate neutrality, complementing other available resources. Provides grants that are disbursed to member states in line with their spatial plans for just transition. These plans identify eligible territories, i.e., those expected to be the most negatively impacted by the green transition.

The Just Transition Mechanism has three pillars: the Just Transition Fund, a dedicated Just Transition program under InvestEU, and a public sector loan scheme to support green transition-related projects that are not attractive to private lenders.

Types of actions and projects

The Mechanism for a Just Transition will contribute to a wide range of measures to promote public investment to foster sustainable development in the regions concerned.

The mix of actions will depend on the circumstances of the area affected by the climate transition challenge and the Spatial Plans developed by member states. These plans will devote special attention to the areas set to suffer the greatest job losses and the transformation of industrial plants with the highest greenhouse gas intensity. The plans will detail the nature of the social, economic and environmental challenges and the economic diversification, redevelopment and environmental restoration needs to be addressed.

In this way, the Mechanism will finance various actions aimed at economic diversification and reconversion of the territories concerned:

• Support for productive investment in small and medium-sized enterprises,
• The creation of new enterprises,
• Research and innovation,
• Environmental redevelopment,
• Clean energy projects,
• The retraining of workers,
• Job search assistance and active inclusion within programs for job seekers,
• The transformation of existing plants (to reduce emissions while protecting jobs).

Highlights

The Mechanism for a Just Transition is a new instrument created in this programming period, the structure and operation of which, while inspired by similar programs (in investment and regional development), has no precedent in other programming periods. It is an expression of the EU’s commitment to addressing the challenges arising from the climate transition (“European Green Deal”).