Press Release

Just Transition opportunity missing from EU budget

Ruhr area
Photo by Wilhei on Pixabay.com

New E3G report reveals proposed EU budget fails to adopt funding plans supporting a just transition to a net zero economy across Europe.

Ongoing EU budget negotiations in European Parliament and Council provide opportunity to redirect funds for socially just energy transition, while accelerating climate action.

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An E3G assessment of all budget instruments in the next seven-year EU budget shows the just transition to a zero carbon economy remains a peripheral concern.

The ‘just transition’ concept means ensuring the shift from a high- to low-carbon economy is both timely and socially fair. This requires policy and financial support.

Today’s report launched by E3G finds EU member state governments and regions have been too slow responding to the needs of communities dependent upon high carbon industries, such as coal, to achieve a socially inclusive energy transition.

The upcoming €1.279 trillion EU budget for 2021-2027 includes several instruments with the potential to support regions in implementing transition plans, developing new innovative industries and accelerating emissions reductions in the EU. However, recognition of the just transition concept is patchy and inconsistent between different budget instruments: Cohesion Policy funds score highly, while the concept is largely absent from other relevant instruments such as Invest EU and Horizon Europe. In some funding streams (e.g. the Connecting Europe Facility) the EU budget risks locking in subsidies for fossil fuel infrastructure rather than supporting a rapid and fair transition.

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Jonathan Gaventa, Director at E3G said:

Europe will undergo rapid changes as it transitions to a net zero carbon economy. The EU budget has enormous potential to both speed up climate action and support communities and workers in the transition. Without a coherent strategy, this opportunity will be missed.