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EU: The Just Transition Fund

The Just Transition Fund (JTF) is the first pillar of the Just Transition Mechanism (JTM).

It will be a key tool to support the territories most affected by the transition towards climate neutrality providing them with tailored support. It is implemented under shared management, under the overall framework of Cohesion policy, which is the main EU policy to reduce regional disparities and to address structural changes in the EU.

The fund will be equipped with €17.5 billion (in 2018 prices; €19.3 billion in current prices). This amount corresponds to fresh money made available to support EU countries in their green transition, out of which €7.5 billion will be financed under the EU’s 2021-2027 budget, while the remaining €10 billion will constitute external assigned revenue stemming from the European Recovery Instrument (and, as such, will be made available from 2021 to 2023).

Member States may, on a voluntary basis, transfer to the JTF additional resources from their national allocations under the European Regional Development Fund (ERDF) and the European Social Fund Plus (ESF+), provided that the total amount transferred does not exceed three times the JTF allocation. Spending from the EU budget will be supplemented by national co-financing according to Cohesion policy rules.

The fund will alleviate the socio-economic costs triggered by climate transition, supporting the economic diversification and reconversion of the territories concerned. This means backing productive investments in small and medium-sized enterprises, the creation of new firms, research and innovation, environmental rehabilitation, clean energy, up- and reskilling of workers, job-search assistance and active inclusion of jobseekers programmes, as well as the transformation of existing carbon-intensive installations when these investments lead to substantial emission cuts and job protection. It is expected to mobilise close to €30 billion in investments.

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