The National Law Review
Summary
On May 18, 2021, the European Parliament (EP) issued a press release announcing the Just Transition Fund (JTF) to assist European Union (EU) countries to address climate neutrality goals. The Just Transition Fund is composed of €7.5 billion from the European Commission’s (EC) long-term EU budget under the 2021-2027 Multiannual Financial Framework (MFF) and €10 billion from the EU recovery plan, NextGenerationEU. According to the press release, eligible projects must focus on economic diversification, reconversion, or job creation, or they must contribute to the transition into a sustainable and circular European economy. JTF will finance:
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Job seeking assistance, upskilling, and reskilling to help workers as Europe shifts to a climate-neutral economy;
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Micro-enterprises;
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Business incubators;
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Universities;
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Public research institutions; and
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Investments in new energy technologies, energy efficiency, and sustainable local mobility.
A “Green Rewarding Mechanism” could be introduced to the JTF for distribution of additional funding to member states if the EP decides to increase the fund’s resources after December 31, 2024. The goal is for the €7.5 billion JTF funds to generate between €30 and €50 billion from investments. Member states that succeed in reducing industrial greenhouse gas (GHG) emissions will receive additional funding.
JTF is part of the European Green Deal Just Transition Mechanism (JTM) initiative, which provides targeted support to regions and sectors in the EU that are most affected by the transition into a green economy. JTM aims to help EU member countries by also:
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Supporting the transition to low-carbon and climate-resilient activities;
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Creating new jobs in the green economy;
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Investing in public and sustainable transport;
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Providing technical assistance;
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Investing in renewable energy sources;
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Improving digital connectivity;
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Providing affordable loans to local public authorities; and
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Improving energy infrastructure, district heating, and transportation networks.
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