Just Transition Fund needs stronger safeguards on inclusion and decarbonisation

A just transition that transforms our energy systems from dependence on polluting sources harmful to human health and our planet into renewable, sustainable solutions can have major environmental and social benefits. Yet if local needs and green criteria are not properly addressed, the transition will no longer be just, nor will it be successful.

The Just Transition Fund (JTF) is an EU-measure designed to help communities in coal-heavy regions across Europe move away from fossil fuels. Although a welcome step towards addressing the challenges of the energy transition, the EU’s current proposal needs to do more to ensure that the Fund supports an inclusive shift driven by a bottom-up approach.

Stronger safeguards in the following two areas could significantly improve the JTF’s chances of success. More details are available in our submission to the consultation.

A bottom-up approach

We ask for the regulation to include, wherever possible, requirements that the JTF support projects that stem from the initiative, needs and capacities of the communities the transition will impact most. It must encourage transparent, public participation and consultation with concerned stakeholders at all stages.

Without this, the JTF risks wasting significant funds on projects that do not address the needs of regions in question and go unused by their communities. To this end, the EU’s partnership principle should be applied as it is defined by the EU budget. Activities that do not comply with it should not be funded.

We know such an approach works. Across the region, Bankwatch member groups have shown significant examples of the necessity of a bottom-up approach for achieving a just transition in former mining centres :

• In Upper Nitra, Slovakia, the community’s approach to regional development has ensured their leadership in defining the priorities for the transition, and the principles upon which it will be founded.
• In Jiu Valley, Romania, after decades of failed transition, the short-lived but successful Romanian Social Development Fund’s Social Development Scheme for Mining Communities (SDSMC) (2004-2011) required community participation in defining and prioritising needs and designing and implementing projects. It centered around informing and integrating the community in development conversations.
• In Eastern Wielkopolska and Silesia, Poland, recent activism on the part of citizens and CSOs to raise awareness about just transition and to start setting some foundational principles and priorities for the communities has been crucial in getting the government to take action, with the communities included.

The JTF has the power to continue this work, but only if it makes a stronger commitment to a bottom-up approach.

Decarbonisation

The JTF should only be used to invest in sustainable technologies that avoid locking in carbon-dependent or high-emission solutions while also creating long-lasting jobs. Financing for both gas and waste-to-energy incineration projects should be excluded. Neither is consistent with a just transition.

Unfortunately, in the current proposal, the InvestEU part of the mechanism leaves the door open for support to gas infrastructure. This is a crucial mistake, because natural gas will need to be phased out by 2035.

Any investments in new gas capacities will create stranded assets. Even incremental improvements of the emission-performance of existing installations blocks new investments that would allow regions to ‘leap forward’ into full climate neutrality.

This exclusion should further apply to carbon capture and storage (CCS) projects, which are nowhere near achieving 100 percent emissions reductions. Instead, the mechanism must build upon the criteria set forth in the new European Investment Bank energy policy.

The JTF should also explicitly exclude funding for waste-to-energy incineration in line with EU’s Renewable Energy Directive and Regulation on Sustainable Finance. These call for waste incineration to be minimised, as well as for its exclusion from renewable energy support schemes (when separate waste collection obligations are not met).

European incinerators generate a significant amount of direct fossil CO₂ emissions , significantly greater than the energy produced through conventional fossil fuel sources such as gas. In 2017, over 40Mt of fossil CO² was released by waste to energy incinerators in the EU 28. This will only have an increasingly adverse impact on climate change. Investment in waste-to-energy projects will also delay the urgent transition to less carbon-intensive power generation infrastructure and to lower carbon options for waste management.

Rather than support unsustainable, short-term fixes, the JTF should prioritise projects in energy efficiency; enable the scaling up of innovative energy storage, e-mobility and renewables; ensure grid investment; and set an Emission Performance Standard of 100g CO₂/kWH.