The Just Transition Fund

KEY POINTS

• The JTF aims to contribute to the single specific objective of enabling regions and people to address the social, employment-related, economic and environmental impacts of the EU’s transition towards its 2030 targets for energy and climate and its objective of a climate-neutral economy by 2050, based on the Paris Agreement (see summary).
• It may also support investment contributing to the objectives of the strategic technologies for Europe platform (STEP) laid down in Regulation (EU) 2024/795.
• The JTF is the first pillar of the Just Transition Mechanism, along with the InvestEU scheme and the Public Sector Loan Facility.
• It is a key element of the European Green Deal (see summary).

Scope

The JTF supports sustainable investment in:

• small and medium-sized enterprises (SMEs), including microenterprises and start-ups;
• research and innovation activities, including those carried out by universities and public research organisations;
• renewable energy and energy efficiency;
• smart and sustainable local mobility, including decarbonisation of the local transport sector and its infrastructure;
• the modernisation of district heating networks;
• digital innovation and connectivity;
• the rehabilitation of brownfield sites and green infrastructure;
• the retraining of workers and jobseekers;
• education and social inclusion, including investment in infrastructure for training centres, and care facilities for children and the elderly.

With the adoption of amending Regulation (EU) 2024/795 establishing the STEP initiative, the JTF may also support productive investment in enterprises other than SMEs, while preserving a focus on SMEs, contributing to the STEP objectives. These objectives are to strengthen the EU’s sovereignty and security, accelerate its green and digital transitions, enhance its competitiveness and reduce its strategic dependencies in three strategic industrial fields: digital and deep tech innovation, clean and resource-efficient technologies, and biotechnologies.

The financing of the following under the JTF is excluded:

• the decommissioning or construction of nuclear power plants;
• activities related to tobacco products;
• investment related to fossil fuels;
• companies in difficulty, unless authorised under temporary State-aid rules set up to address exceptional circumstances.

Resources

• The JTF has resources of €8.4 billion at current prices from the 2021–2027 multiannual financial framework. The main amount may be increased, as appropriate, by voluntary transfers from the European Regional Development Fund and the European Social Fund Plus.
• €10.8 billion is to come from the EU recovery instrument NextGenerationEU, in addition to the planned resources:
  • €2 billion in 2021
  • €4 billion in 2022
  • €2 billion in 2023.
• The common EU rules for socioeconomic and cohesion policy funds are set out in Regulation (EU) 2021/1060 (see summary).
• Annex I to the regulation sets out the JTF allocations for EU Member States, while Annex II provides a template for territorial just transition plans to be submitted by Member States to the European Commission.

Access to funding

• Access to JTF funding is dependent on the Member States committing to achieving climate neutrality by 2050.
• Only 50% of the national allocation will be available to those Member States that have not yet committed to the target.

Green reward mechanism

• If the JTF’s resources are increased after 31 December 2024, the additional resources will be awarded to Member States based on a ‘green reward’ mechanism.
• This means Member States that reduce their greenhouse gas emissions at a faster rate will receive additional allocations.