Posted on January, 09 2020

What’s happening?

On 14 January, the European Commission is expected to propose a fund to support the shift to a climate neutral EU. This fund, known as a ‘just transition mechanism’, will aim to mobilise €100 billion to help regions whose economies are based on carbon-intensive activities, like coal mining. 

Why does it matter?

The climate emergency requires us to cut emissions massively, starting now, and for the EU to reach net zero emissions - climate neutrality - by 2040. This means every part of Europe must take urgent climate action. But in some regions, many jobs are based in sectors which will either have to adapt massively to reduce greenhouse gases enough, or close down. Those workers and their communities need to be supported as their economies change, so the transition to climate neutrality is fair and just across Europe. The EU ‘just transition mechanism’ can be a key part of that support.

What is WWF looking for?

To truly deliver, the just transition mechanism should do five key things:

1. Leverage and contain new funds (both public and private) to implement a comprehensive just transition. 
2. Only finance projects consistent with a sustainable and climate-neutral Europe by 2040 - this means fossil fuel investments are excluded.
3. Encourage effective partnerships, including with civil society, local governments and trade unions
4. Be part and parcel of comprehensive regional plans to get climate neutral in a socially just way: such plans must include phase-out dates for fossil fuels.  
5. Ensure support to Europe’s coal regions, as a priority.

Katie Treadwell, Energy Policy Officer, WWF European Policy Office said:
“The move to climate-neutrality can open up new and sustainable economic opportunities across Europe. To ensure this is the case, and that desperately needed climate action is supported far and wide, the EU ‘just transition mechanism’ is crucial. It must support an inclusive move to climate-neutrality in those regions which most need it.”

More information:

The just transition and the EU Emissions Trading System
In WWF’s view, an effective just transition mechanism must leverage and contain new funds (both public and private). Existing funds can also be optimised - for example, the Emissions Trading System (ETS) could do a lot more towards a just transition, as recent WWF analysis reveals. WWF’s findings show that EU Member States are spending billions of Euros less on climate action through the ETS than they could. 

Altogether, of the €13.9 billion total ETS revenues in 2018, one-third - €4.6 billion - was reportedly not spent on climate actions consistent with a just transition, like insulating homes or installing renewable energy. What’s more, emissions allowances worth €11 billion were given out to polluters for free. This makes almost €16 billion of missed money for climate action last year. 

If the ETS was tightened up, billions more could be spent on actions compatible with a fair path to a climate neutral Europe. On the contrary, if the money is spent in ways that delay a just transition, this will only worsen the health and environmental damage communities will suffer.

WWF’s asks for the just transition mechanism in more detail:

1. Leverage and contain new funds (both public and private) to implement a comprehensive just transition.The transition will require new and upfront investment. It will also require targeted investment to ensure the benefits and costs of the transition are spread fairly.

The new just transition mechanism should complement existing EU funding sources to help them contribute to the just transition. Such funds include the regional development and cohesion funds, but other sources, such as the Emissions Trading System, could provide billions of Euros for just climate action. 

The mechanism could, for instance, set criteria for a just transition, or be useable  in conjunction with other EU funds. However, it must not draw resources away from other funds which can support the just transition. Private finance will also be key to accessing the scale of investment required.

2. Only finance projects consistent with a sustainable and climate-neutral Europe by 2040, meaning no fossil fuel investments.

The just transition fund should exclude all fossil fuels from financing. Maintaining a polluting fossil fuel industry will raise the overall costs of the transition by delaying it and leaving regions with stranded assets. Moreover, by failing to address climate change, the poorest and most vulnerable in society will suffer disproportionately. By contrast, embracing a clean and just energy transition to a low carbon and resilient economy early will boost prosperity and drive overall employment and generate net decent and sustainable jobs.

‘Advanced coal technologies’ and Carbon Capture and Storage must also be avoided. Despite years of hype by the coal industry, such technologies are still unproven and not commercially viable, and make no sense given the readily available, cost-effective and sustainable alternatives like wind and solar power. ‘Climate-proofing’ criteria should be set for projects receiving just transition mechanism funding..

3. Encourage effective partnerships, including with civil society, local governments and trade unionsThe just transition mechanism should respect and reinforce the involvement of all partners in just transition plans. Furthermore, the roles of each stakeholder and their decision-making power must also be clearly defined. The fund should recognise the need for capacity building of stakeholders on the just transition and contain provisions to support it.

4. Be part and parcel of comprehensive regional plans to get climate neutral in a socially just way: such plans should include phase-out dates for fossil fuels.  

Delaying the transition will increase the costs of the transition.  Therefore, transition support should be contingent on transition plans containing commitments to phase out fossil fuels and a timeline consistent with keeping global heating to 1.5°C and EU climate neutrality. These transition plans should be developed locally and with the participation of all stakeholders.

5. Ensure support to Europe’s coal regions, as a priority

Our actions over the next 10 years will be critical in determining whether we reach or fail to attain climate neutrality. There is one investment cycle left to decide whether we choose to lock-in fossil fuels or move to sustainable renewable energy. Coal as one of the dirtiest sources of fossil energy needs to go as quickly as possible. Regions still dependent on coal require targeted support for their transition. However, funding must not be exclusive to coal regions nor be available indefinitely. 

Contact: 

Katie Treadwell
Energy Policy Officer
WWF European Policy Office 
ktreadwell@wwf.eu 
+32 470 73 57 48

Sarah Azau
Media Manager 
WWF European Policy Office 
sazau@wwf.eu
+32 473 573 137