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The Just Transition Fund (JTF) will contribute towards a fair and inclusive green transition
On Monday 7 June, the Council of the European Union announced that it has adopted the Just Transition Fund (JTF): an EUR 17.5 billion fund established to ensure that the green transition is fair and inclusive.
The formation of this fund is one of the actions which will contribute to the achievement of the European Union’s climate goals, namely a 55% reduction in greenhouse gas emissions by 2030 and climate neutrality by 2050.
The JTF will assist communities and territories that heavily rely on fossil fuels and greenhouse gas-intensive industries. More specifically, it will be used to finance projects which will alleviate the socio-economic costs of these areas. In doing so, the fund will prevent widening disparities and help transform heavily polluting industries in the EU.
Small and medium-sized enterprises (SMEs) will greatly benefit from the establishment of this fund as the JTF will be used to support start-ups and the creation of new companies. Taking this further, it will invest in training, job-search assistance, and social inclusion. Thus, it will result in the development of new employment opportunities.
In addition to this, the JTF will invest in several other areas including research and innovation, affordable green energy and energy storage, digitalisation, and the circular economy. Nuclear power stations, fossil fuels, and tobacco products will not receive financial support from the fund.
Portuguese Minister for Planning Nelson de Souza commented on the JTF: “The success of the European Green Deal rests on us mitigating the consequences for those most affected by the decarbonisation of the economy. The Just Transition Fund will provide much needed support to companies and workers at local level, so that we can combat climate change together as a Union, leaving no one behind.”
It must be noted that while the JTF is a EUR 17.5 billion fund, member states may also contribute to its programmes. Moreover, the Council of the European Union reports that the member states can transfer resources from other funds (the European Regional Development Fund and the European Social Fund Plus). In this way, nearly EUR 30 billion can be mobilised.
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