On 11 December 2019, the Commission presented the European Green Deal, which is an aspiration for Europe to become the first climate-neutral bloc by 2050. Europe’s transition to a sustainable economy means significant investment efforts in all sectors: achieving current climate and energy targets for 2030 will require additional investments of EUR 260 billion per year by 2030.
The basic premise of the European Green Deal investment plan is to make the EU the world’s first climate neutral bloc. The target would be achieved by 2050, investments necessary to carry out in this area could amount to even 1 trillion euros.
The Fair Transformation Mechanism is a key tool to ensure that the transition to a climate neutral economy proceeds fairly, leaving no one behind. While all regions will need funding and this is foreseen in the European Green Deal Investment Plan, the mechanism provides targeted support to mobilize at least EUR 100 billion in the regions most affected by the negative socioeconomic effects of transformation in 2021-2027 and to mitigate these effects . The mechanism will enable investments necessary to support employees and communities whose functioning depends on the fossil fuel value chain. Through all instruments directly linked to transformation, it will complement a significant contribution from the EU budget.
The fair transformation mechanism will be based on three main funding sources:
1) The Fund for Just Transformation, which will receive new EU funds of EUR 7.5 billion, which will increase the amount foreseen in the Commission proposal for the next long-term EU budget. In order to use their funds from the fund, Member States, when conducting a dialogue with the Commission, will have to identify eligible areas in the so-called territorial plans for just transformation. They will also have to commit that Member States will contribute the same amount from the European Regional Development Fund and the European Social Fund Plus to the resources of the Fair Transformation Fund and make additional national resources available. In total, this will provide funding of EUR 30-50 billion, which will attract even more investment. The fund will primarily be used to provide grants to regions. For example, it will support employees in developing the skills and competences needed in the future on the labor market, and help SMEs, start-ups and business incubators to create new economic opportunities in these regions; It will also support investments aimed at converting to clean energy, for example increasing energy efficiency.
2) a special fair transformation system under InvestEU to launch investments worth up to EUR 45 billion. Its purpose will be to attract private investment, including in sustainable energy and transport infrastructure, benefiting the affected regions and helping these economies find new sources of growth;
3) a loan facility from the European Investment Bank for the public sector guaranteed by the EU budget to launch investments worth EUR 25-30 billion. It will be used for loans to the public sector, for example for investments in heating networks and renovation of buildings. In March 2020, the Commission will present a legislative proposal to establish this instrument.
Climate Minister Michał Kurtyka assured on Twitter that, as proposed by the European Commission, investment opportunities for Polish coal regions are opening up to PLN 100 billion.
– This proposal shows that there is an understanding of the EC for specific challenges that individual regions in Poland will have to face. In order to guarantee a fair transformation for all citizens, we must provide local societies in regions dependent on the extraction of fossil fuels, the conditions for further development – comments Michał Kurtyka.
Source:https://ec.europa.eu/commission/presscorner/detail/en/qanda_20_24