Just Transition Fund (JTF)

What is the Just Transition Fund (JTF)?

The Just Transition Fund (JTF) is a financial instrument created in 2021 by the European Union to provide support to all Member States, under cohesion policy, to mitigate the economic and social consequences of the energy, environmental and climate transition.

It aims to support the diversification and transition of the territories, industries and workers most dependent on fossil fuels, and therefore the most vulnerable. The targeted sectors are those set to disappear, threatening numerous jobs, such as:

• the production of coal, lignite, peat and oil shale;
• coal-fired power stations;
• the production of cement, paper and fertilisers.

The JTF will also facilitate the implementation of the European Green Deal.

What is the JTF budget and who are its main beneficiaries?

The JTF has a budget of €19.2 billion for the period 2021-2027, to which Member States can transfer additional resources from their national allocations under the European Regional Development Fund (ERDF) and the European Social Fund Plus (ESF+).

The fund specifically aims to help the people and places most affected by the transition to climate neutrality. It is therefore more targeted, both geographically and thematically, than other cohesion policy funds. Poland is the main beneficiary with €3.8 billion (20% of the total), followed by Germany with €2.5 billion and Romania with €2.1 billion.

How does the Just Transition Fund work?

The JTF follows shared management rules, which imply close cooperation between national, regional and local authorities. Member States prepare their Territorial Just Transition Plans (TJTPs), which identify the eligible territories, the challenges of the transition, the activities concerned, the financing needs and the development objectives to be achieved by 2030. These plans are then submitted to the European Commission for approval.

After approval, the Member States and eligible regions are responsible for deciding how JTF resources are allocated among the projects applying for funding. JTF financing is therefore qualified as State aid, which must be compatible with the relevant European rules.

Financial data and the map of territories eligible for the JTF are accessible here.

Which projects are eligible?

The eligible projects can be varied, as long as they facilitate the energy, environmental and climate transition, as well as the economic diversification of eligible territories. They include, among others:

• aid to SMEs and the creation of new businesses;
• training and reskilling of workers;
• energy efficiency of buildings;
• clean mobility;
• renovation and modernisation of district heating networks;
• digital;
• circular economy;
• decarbonisation;
• production of renewable energy.

How can you obtain Just Transition Fund funding?

The process for obtaining JTF funding starts with the submission of an application at regional level, following the publication of dedicated calls for projects in which the competent authority sets out the eligibility and evaluation criteria. Public authorities then carry out a thorough evaluation of the proposals and select the most competitive projects.

Selected proposals involving large amounts of State aid are forwarded to the European Commission for a detailed assessment against the criteria set out in the applicable State aid rules (State aid notification, typically beyond €30 million per company per project). After its review, the Commission decides whether the aid measure is approved.

Once the Commission’s authorisation is obtained, the project promoter finalises a financing agreement with the public authorities. With the agreement in place, the project enters its implementation phase. The beneficiary is then required to periodically inform the public authorities and the European Commission of its progress and of any developments affecting the initial plan.

What are the selection criteria?

Selection criteria may vary from region to region. Generally speaking, the project must be consistent with the objectives of the JTF, particularly in terms of climate transition and social impact. For example, it must:

• lead to a significant reduction in greenhouse gas emissions;
• have a tangible impact on employment in the region;
• have a solid financial plan;
• be technically, operationally and financially mature;
• have a positive impact on the surrounding region.

How does european economics support its clients with the Just Transition Fund?

european economics mobilises its unique expertise in State aid for clients who wish to apply for the JTF.

We support them in carrying out project engineering to maximise the funding request and minimise the risk of failure, in preparing application files, and throughout the notification procedure to the European Commission until approval is obtained, an area in which european economics has a 100% success rate.