Struggles in Europe's Green Agenda: Financial Burden Mounting
The European Union's Just Transition Fund (JTF), established in 2021 with an initial budget of €17.5 billion, aims to mitigate social inequalities during the transition to climate neutrality. However, the fund faces significant challenges in achieving its goal.
One of the key issues is the lack of clear and realistic strategic objectives in many Territorial Just Transition Plans (TJTPs). Instead, these plans often fall back on generic objectives like green jobs or digital transformation without articulating concrete pathways. To bridge this gap, it is essential to strengthen local institutions, develop clear strategic objectives, and better integrate social and economic policies.
Rising inflation, supply chain disruptions, and monetary tightening have increased the cost of transition projects, potentially making them financially unrealistic without an expansion in funding or a recalibration of goals. The JTF, with a budget of nearly €20 billion for 2021–2027, could provide a solution, but its effectiveness is being limited by slow implementation.
The JTF's remit includes diversifying economies, fostering clean energy activities, promoting environmental remediation, and providing training for workers. However, the active involvement of trade unions and workers would be essential in designing TJTPs to better tailor development strategies to concrete local workforce needs.
The implementation of the JTF varies greatly across different territories, with progress being slow. As of March 2024, only a small portion of the total JTF allocation had been spent. In Italy and Spain, despite large allocations, funds remain largely unspent, raising concerns about the readiness of national and local administrations to absorb and deploy resources swiftly. Germany, while not highlighted as a problem area, faces similar transitions though its stronger administrative capacity allows comparatively better fund absorption.
The geopolitical context is reshaping the landscape in which the JTF operates. New initiatives like ReArm Europe, now Readiness 2030, command significant financial and political attention, potentially diverting resources away from green transition efforts. Debates around budget allocations for the next Multiannual Financial Framework (2028-2035) suggest a pivot towards defence and security, with climate policies facing renewed scrutiny.
Successful transition planning demands interdisciplinary expertise spanning from industrial strategy to territorial planning, environmental remediation, workforce development, and financial oversight. The JTF faces challenges in institutional capacity across many target regions, with local authorities often lacking necessary staff, resources, and technical know-how.
In Italy's Sulcis-Iglesiente region, the JTF's focus on workforce requalification is critical, but procedural bottlenecks risk undermining timely impact. In Germany, the JTF's implementation is criticized as top-down and perceived as merely financing pre-existing measures. In Spain, the JTF is implemented through a comprehensive Just Transition Strategy, addressing similar obstacles in regions heavily impacted by decarbonisation.
The securitisation of EU policy could marginalise social and environmental objectives, reducing the ambitious goals of the JTF. To ensure the fund's success, it is crucial to prioritise social and environmental concerns, maintain political will, and address the challenges of slow implementation and bureaucratic hurdles.
References: [1] European Commission. (2022). Just Transition Fund: Latest figures. Retrieved from https://ec.europa.eu/info/publications/just-transition-fund-latest-figures_en
[2] European Court of Auditors. (2023). The European Union's Just Transition Fund: Progress and challenges. Retrieved from https://www.eca.europa.eu/en/Pages/Publications/The-European-Unions-Just-Transition-Fund-Progress-and-challenges
[3] European Parliamentary Research Service. (2024). The European Union's Just Transition Fund: An assessment of its implementation and impact. Retrieved from https://www.europarl.europa.eu/RegData/etudes/IDAN/2024/684780/IPOL_IDA(2024)684780_EN.pdf
- The Just Transition Fund (JTF) in the European Union encourages trade unions and workers to engage in Territorial Just Transition Plans (TJTPs) to better align its objectives with local workforce needs and skills development.
- Education policy should be integrated into TJTPs, focusing on the training of workers for clean energy activities and environmental remediation.
- Civil society must be part of the dialogue regarding JTF implementation and policy-and-legislation, ensuring a focus on environmental-science and climate-change concerns.
- Urban policy needs to address the challenges of the labour market, particularly in regions undergoing decarbonization, as part of the JTF's diversification of economies.
- Regional finance and business development should prioritize just transition projects, given the competition from initiatives like ReArm Europe (now Readiness 2030) that may divert resources away from green transition efforts.
- General news outlets should cover the progress and challenges of the JTF, informing civil society and promoting dialogue about the fund's role in addressing social inequalities during the transition to climate neutrality.
- Strengthening local institutions and increasing the capacity of authorities in target regions will help overcome the challenges in implementing the JTF and achieve its strategic objectives for a sustainable and just future.
