EU 'confident' €100bn green transition fund will come to fruition
A draft €100bn "Just Transition Mechanism" outlined by the European Commission as part of its Green Deal last week will eventually see the light in January, EU officials have said. The amount of "fresh money" under the new fund is, however, expected to be limited.
Work on the detail of the fund has started after EU heads of state and governments “clearly endorsed” the European Green Deal’s “vision and path” at last week’s EU summit, officials said.
The Commission confirmed on Monday (16 December) that it is currently “in the process of developing its proposal” for the €100bn Just Transition Mechanism.
EU leaders have instructed the Commission to work on the funding “that will be necessary to support the transition towards climate neutrality by 2050,” said Dana Spinant, the EU executive’s deputy chief spokesperson.
“Work is undergoing to map how exactly this will be drafted,” including the amount of private and public funding available under the new scheme, added Vivian Loonela, the EU Commission’s environment spokesperson.
EU leaders have “specifically welcomed the €100bn figure” in the proposed Just Transition Mechanism, EU spokes said. “Confident” that “it will be possible to issue a proposal that twill reach €100bn” under #EUGreenDeal.— Frédéric Simon (@FredSimonEU) December 16, 2019
JustTransition https://t.co/WXM96bIbLS via @EC_AVService
Leaders from the 28 EU member states endorsed the Commission’s European Green Deal at a summit last week, including a flagship objective to make Europe the first climate neutral continent in the world by 2050.
But Poland abstained, saying it needed more clarity on the new sources of funding available for regions expected to be the most affected by the transition to net-zero emissions.
“Unfortunately, the European Council and the Green Deal proposal did not give us any assurances in this regard,” said Magda Smokowska, from the Polish Electricity Association (PKEE). Still Smokowska said the Polish power sector was “looking forward” to the Commission proposal for a Just Transition Mechanism, expected to be published on 8 January.
“This transition should leave no one behind,” said European Commission President Ursula von der Leyen, as she unveiled the Green Deal last week.
The Just Transition Mechanism will bring together public and private funding, including around €30bn for poorer EU regions under a new fund outlined last week under the European Green Deal. In addition, up to €1 trillion worth in loans is expected to be available under the European Investment Bank’s new energy lending policy.
But as talks over the EU’s next seven-year budget drag on, the exact amount of “fresh money” available under the new fund is still unclear. Germany, Finland and the Netherlands are reluctant to increase national contributions to the EU budget.
This means the amount of “fresh money” is unlikely to exceed €10 billion, EURACTIV understands.
Most of EU funding available is therefore expected to come via the European Investment Bank (EIB) and a re-allocation of funding currently available under the EU’s cohesion policy aimed at poorer regions.
Dana Spinant of the European Commission insisted that EU leaders had “specifically welcomed the €100bn figure” in the Commission’s proposal. Work is ongoing, she added, saying the Commission is “confident” that “it will be possible to issue a proposal that will reach €100bn".
Frederic Simon, EurActiv.com
This article first appeared on EurActiv.com, an edie content partner