Social Europe

politics, economy and employment & labour

  • Themes
    • Strategic autonomy
    • War in Ukraine
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

Just Transition Fund can boost European coal phase-out

Rebekka Popp and Pieter de Pous 17th February 2020

The new Just Transition Fund puts a coal phase-out by 2030 for the whole of Europe within reach.

Just Transition Fund coal phase-out
Rebekka Popp

Only a year ago, the odds that Slovakia would plan to phase out coal power were widely seen as small. Yet the combination of a rising European carbon price and an offer of support through the European Union’s Coal Regions in Transition Platform led the country to announce a phase-out of lignite by 2023.

The European Commission’s proposal for a Just Transition Fund has the potential to add to this momentum, by making the EU’s remaining coal countries an offer too attractive to refuse. The fund is one of three pillars of a new Just Transition Mechanism, a central part of the European Green Deal. Next to it, a dedicated scheme under the InvestEU fund and a public-sector loan facility with the European Investment Bank will support regions and sectors most affected by the union’s transition to climate neutrality.

Just Transition Fund coal phase-out
Pieter de Pous

Under the European Green Deal, the commission combines a badly-needed effort to raise its climate ambition with a green-investment plan explicitly designed to close the divergence on low carbon between many western- and eastern-European countries.

Broad focus

The Just Transition Fund will be open to all member states and help regions with coal, peat, oil-shale and carbon-intensive industrial activities to slash their emissions by closing fossil infrastructure. This broad focus is necessary because reaching climate neutrality requires all member states to reduce emissions in all sectors of the economy—be that energy, buildings, transport or livestock farming.


Our job is keeping you informed!


Subscribe to our free newsletter and stay up to date with the latest Social Europe content. We will never send you spam and you can unsubscribe anytime.

Sign up here

To receive funding, countries will need to draw up territorial transition plans. Such plans are an essential element of a just-transition process, as they give prospective security to workers, industries, investors and communities. Importantly, these strategies need to be driven by all stakeholders from affected regions: people from a given region best know its strengths and weaknesses and what they want it to look like in the future.

Developing a transition plan therefore requires an inclusive process, which gives all interests a seat at the table—not just the incumbents who often dominate such debates. This means that environmental organisations or more recent joiners of the climate movement, such as the school strikers, should have their say. 

The fund requires the transition strategies to be consistent with National Energy and Climate Plans. This, however, will not be enough. The current versions of these plans are unlikely to get the EU close enough to its 2030 target—let alone the new, 2050 climate-neutrality target. In fact, those draft plans revealed that major coal countries in Europe were only planning small reductions in coal production before 2030.

Need to strengthen

If Europe is to avoid getting stuck in transition, the commission’s proposal will need to be strengthened, so that countries receiving funding are in fact planning to phase out coal or another polluting activity at a rate which ensures the EU will become carbon-neutral by 2050 at the very latest.

Under the proposed allocation criteria for the Just Transition Fund, Poland and Germany will stand to benefit the most. Allocation of funding is based on greenhouse-gas emissions, employment or production levels in a certain industry, economic development and the number of inhabitants—climate ambition is entirely missing from this equation.

Poland at the moment is nowhere near planning for a phase-out of coal. Germany’s envisaged 2038 endpoint meanwhile is less ambitious than that of all other western-European countries. The Powering Past Coal Alliance, a global coalition of national and subnational governments, businesses and organisations, sets 2030 as an international benchmark for coal phase-out in countries belonging to the Organisation for Economic Co-operation and Development.

In contrast to Germany and Poland, Greece plans a timely phase-out and has recently announced it will stop burning coal by 2028—most of it already by 2023—yet it is left with a much smaller share of the Just Transition Fund. Those countries which commit to more climate action and plan for a major transition within the coming years should also receive more financial support from an EU budget that covers the next seven years.

Tight window

The European Council president, Charles Michel, has announced he wants to conclude a deal on the EU budget at a council meeting of heads of state and government on February 20th. If successful, this means that allocations between funds and among member states will be set. The window of opportunity for adding climate ambition to the allocation criteria of the Just Transition Fund is therefore tight. In addition to the initial allocations among member states and whether these consider national climate ambition, negotiations on the proposed Just Transition Fund will however run for most of the year, providing a second major opportunity to improve climate conditionality.


We need your support


Social Europe is an independent publisher and we believe in freely available content. For this model to be sustainable, however, we depend on the solidarity of our readers. Become a Social Europe member for less than 5 Euro per month and help us produce more articles, podcasts and videos. Thank you very much for your support!

Become a Social Europe Member

The European Parliament has already made clear that Just Transition funding must be conditional on coal phase-out plans. Among member states, the EU countries which are members of the Powering Past Coal Alliance control a comfortable majority and share a common interest in insisting on strict climate conditionality.

There are good reasons for optimism. Coal is already in terminal decline. E3G’s recent analysis of the state of the energy transition in central and eastern Europe—a region with many coalmining countries—shows that the role of coal is already diminishing because it is too expensive, while governments are looking for alternatives, such as ever-cheaper renewable energy.

Progress on moving beyond coal has direct consequences for the question as to by how much the EU can increase its climate pledge for 2030, which it will need to do before the COP26 climate conference in Glasgow at the end of this year. An analysis by the think tank Sandbag from March 2019 shows that the national coal phase-out plans which existed back then would already help the EU deliver an emissions reduction of 50 per cent by 2030. Since then more announcements have been made, taking the EU’s emissions reductions well beyond that.  

The prospect of more national phase-out commitments, supported through a Just Transition Fund, should now inspire the commission, and the member states, to make a bold proposal to increase its 2030 climate targets in the spring of this year.

Rebekka Popp and Pieter de Pous

Rebekka Popp is a researcher in E3G's Berlin office, where she works on Just Transition, coal phase-out and industry decarbonisation in the EU. Pieter de Pous works there as a senior adviser on the organisation's coal and gas programme.

You are here: Home / Economy / Just Transition Fund can boost European coal phase-out

Most Popular Posts

Russian soldiers' mothers,war,Ukraine The Ukraine war and Russian soldiers’ mothersJennifer Mathers and Natasha Danilova
IGU,documents,International Gas Union,lobby,lobbying,sustainable finance taxonomy,green gas,EU,COP ‘Gaslighting’ Europe on fossil fuelsFaye Holder
Schengen,Fortress Europe,Romania,Bulgaria Romania and Bulgaria stuck in EU’s second tierMagdalena Ulceluse
income inequality,inequality,Gini,1 per cent,elephant chart,elephant Global income inequality: time to revise the elephantBranko Milanovic
Orbán,Hungary,Russia,Putin,sanctions,European Union,EU,European Parliament,commission,funds,funding Time to confront Europe’s rogue state—HungaryStephen Pogány

Most Recent Posts

reality check,EU foreign policy,Russia Russia’s invasion of Ukraine—a reality check for the EUHeidi Mauer, Richard Whitman and Nicholas Wright
permanent EU investment fund,Recovery and Resilience Facility,public investment,RRF Towards a permanent EU investment fundPhilipp Heimberger and Andreas Lichtenberger
sustainability,SDGs,Finland Embedding sustainability in a government programmeJohanna Juselius
social dialogue,social partners Social dialogue must be at the heart of Europe’s futureClaes-Mikael Ståhl
Jacinda Ardern,women,leadership,New Zealand What it means when Jacinda Ardern calls timePeter Davis

Other Social Europe Publications

front cover scaled Towards a social-democratic century?
Cover e1655225066994 National recovery and resilience plans
Untitled design The transatlantic relationship
Women Corona e1631700896969 500 Women and the coronavirus crisis
sere12 1 RE No. 12: Why No Economic Democracy in Sweden?

Eurofound advertisement

Eurofound webinar: Making telework work for everyone

Since 2020 more European workers and managers have enjoyed greater flexibility and autonomy in work and are reporting their preference for hybrid working. Also driven by technological developments and structural changes in employment, organisations are now integrating telework more permanently into their workplace.

To reflect on these shifts, on 6 December Eurofound researchers Oscar Vargas and John Hurley explored the challenges and opportunities of the surge in telework, as well as the overall growth of telework and teleworkable jobs in the EU and what this means for workers, managers, companies and policymakers.


WATCH THE WEBINAR HERE

Foundation for European Progressive Studies Advertisement

The winter issue of the Progressive Post magazine from FEPS is out!

The sequence of recent catastrophes has thrust new words into our vocabulary—'polycrisis', for example, even 'permacrisis'. These challenges have multiple origins, reinforce each other and cannot be tackled individually. But could they also be opportunities for the EU?

This issue offers compelling analyses on the European health union, multilateralism and international co-operation, the state of the union, political alternatives to the narrative imposed by the right and much more!


DOWNLOAD HERE

Hans Böckler Stiftung Advertisement

The macroeconomic effects of re-applying the EU fiscal rules

Against the background of the European Commission's reform plans for the Stability and Growth Pact (SGP), this policy brief uses the macroeconometric multi-country model NiGEM to simulate the macroeconomic implications of the most relevant reform options from 2024 onwards. Next to a return to the existing and unreformed rules, the most prominent options include an expenditure rule linked to a debt anchor.

Our results for the euro area and its four biggest economies—France, Italy, Germany and Spain—indicate that returning to the rules of the SGP would lead to severe cuts in public spending, particularly if the SGP rules were interpreted as in the past. A more flexible interpretation would only somewhat ease the fiscal-adjustment burden. An expenditure rule along the lines of the European Fiscal Board would, however, not necessarily alleviate that burden in and of itself.

Our simulations show great care must be taken to specify the expenditure rule, such that fiscal consolidation is achieved in a growth-friendly way. Raising the debt ceiling to 90 per cent of gross domestic product and applying less demanding fiscal adjustments, as proposed by the IMK, would go a long way.


DOWNLOAD HERE

ILO advertisement

Global Wage Report 2022-23: The impact of inflation and COVID-19 on wages and purchasing power

The International Labour Organization's Global Wage Report is a key reference on wages and wage inequality for the academic community and policy-makers around the world.

This eighth edition of the report, The Impact of inflation and COVID-19 on wages and purchasing power, examines the evolution of real wages, giving a unique picture of wage trends globally and by region. The report includes evidence on how wages have evolved through the COVID-19 crisis as well as how the current inflationary context is biting into real wage growth in most regions of the world. The report shows that for the first time in the 21st century real wage growth has fallen to negative values while, at the same time, the gap between real productivity growth and real wage growth continues to widen.

The report analysis the evolution of the real total wage bill from 2019 to 2022 to show how its different components—employment, nominal wages and inflation—have changed during the COVID-19 crisis and, more recently, during the cost-of-living crisis. The decomposition of the total wage bill, and its evolution, is shown for all wage employees and distinguishes between women and men. The report also looks at changes in wage inequality and the gender pay gap to reveal how COVID-19 may have contributed to increasing income inequality in different regions of the world. Together, the empirical evidence in the report becomes the backbone of a policy discussion that could play a key role in a human-centred recovery from the different ongoing crises.


DOWNLOAD HERE

ETUI advertisement

The EU recovery strategy: a blueprint for a more Social Europe or a house of cards?

This new ETUI paper explores the European Union recovery strategy, with a focus on its potentially transformative aspects vis-à-vis European integration and its implications for the social dimension of the EU’s socio-economic governance. In particular, it reflects on whether the agreed measures provide sufficient safeguards against the spectre of austerity and whether these constitute steps away from treating social and labour policies as mere ‘variables’ of economic growth.


DOWNLOAD HERE

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us

RSS Feed

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube