EU Just Transition Fund: how does it work? [Animated Infographic]

Written by Agnieszka Widuto,

The Just Transition Fund will support European Union (EU) regions relying on fossil fuels and high-emission industries in their green transition. Our animated infographic shows how it works.

What is the Just Transition Fund?

The Just Transition Fund is an EU funding tool for regions dependent on fossil fuels and high-emission industries. The aim is to help them prepare for the transition necessary to achieve at least a 55 % reduction in emissions by 2030, and climate neutrality by 2050.

The European Green Deal and EU climate policies aim to improve environmental quality, ensure clean air and reduce health risks for the population. To achieve this green transition, the EU will support carbon-intensive regions in diversifying their economies and creating new jobs. Activities supported by the Just Transition Fund will include investments in small and medium-sized enterprises, research and innovation, renewable energy, emissions reduction, clean energy technologies, site regeneration, circular economy, and upskilling and reskilling of workers. The Just Transition Fund is part of a broader Just Transition Mechanism, which also includes two other pillars: a scheme under InvestEU aimed at mobilising private investments and a public sector loan facility to generate public financing.

The introductory section of the infographic provides an overview of the most important details of the Just Transition Fund.

How much funding?

In January 2020, the European Commission proposed an allocation for the Just Transition Fund (JTF) amounting to €7.5 billion under the 2021‑2027 EU budget. In light of the coronavirus pandemic, the Commission increased this amount to €10 billion from the EU budget and added a top-up of €30 billion from the Next Generation EU instrument in May 2020. This brought the total JTF amount to €40 billion. It is expected that the EU budget amount will be complemented by national co-financing and transfers from the European Regional Development Fund and the European Social Fund+. With additional funds generated through InvestEU and public sector loan facility, the Just Transition Mechanism is expected to mobilise at least €150 billion of investment.

Animated  infographic on Just Transition Fund

At the European Council meeting in July 2020, EU leaders proposed an allocation of €7.5 billion under the EU budget and €10 billion from Next Generation EU, reducing the total JTF budget to €17.5 billion. The European Parliament, in its amendments to the Commission proposal voted in September 2020, recommended raising the core budget amount of JTF to over €25 billion.

A section of the infographic called ‘Allocations’ shows a break-down of the amounts for each pillar of the Just Transition Mechanism, expected additional funding mobilised, and amounts proposed by each of the EU institutions during the negotiation process. By clicking on each respective EU institution, the infographic immediately shows the differences between their proposals.

Which regions will the JTF support?

Funding is available to all EU countries. The European Commission identified a preliminary list of eligible regions in each country.

The allocation method is based on the following socio-economic criteria: industrial emissions in regions with high carbon intensity; employment in industry in these regions; employment in coal and lignite mining; production of peat; production of oil shale and oil sands.

In the ‘JTF Allocation Method’ section, the infographic shows total JTF allocations by Member State and the aid intensity per inhabitant, according to the May 2020 Commission proposal. It explains the allocation method and provides graphs for each of the allocation components by Member State. Click on an individual country to see more detailed information on the allocations. The visualisation also takes the additional criteria mentioned in the proposal (minimum and maximum level of support and a prosperity criterion) into account.

The infographic was prepared by Sorina Ionescu and Frederik Scholaert. Each section of the infographic provides a link to Further reading materials, including an EPRS legislative briefing on the Just Transition Fund.