1.64 billion euros to Czechia for a fair transition to climate neutrality
The European Commission has adopted a plan to support Czechia with 1.64 billion euros in the form of grants from the Just Transition Fund (JTF) to support the phasing out of the coal-fired power by 2033.
The regions of Karlovarsky, Ústecky and Moravskoslezsky host 21 thousand workers in the coal and chemical industry fields who will benefit from the JTF once the process of phasing-out will start.
In particular, in the Ústecky region there are over 5 thousand coal-related jobs which contribute to the extraction of lignite. The JTF will support investments to shift the economy towards renewable energy sources and a circular economy. The JTF priorities are in research and development sectors, where innovation platforms and clusters are foreseen. While Moravskoslezsky is the biggest coal-mining region in Czechia with 5000 people as workforce. In this context, the fund will contribute to reducing air pollution and water contamination, investments are planned also in the energy storage and energy research.
“I welcome the approval of this ambitious plan for a new green future of Czechia. Under the 2014-2020 programming period, the Cohesion Policy already supported investments in 11,000 enterprises, helping to retain or create 10,676 direct jobs", said the European Commissioner for Cohesion and Reforms, Elisa Ferreira. "Regions of Karlovarsky, Ustecky and Moravskoslezky will now have at their disposal funds to implement a just transition of their local economy. Together we will make sure that the climate transition in Czechia goes hand in hand with new opportunities for the concerned regions and their citizens”, Ferreira added.
How the Just Transition Fund works
The JTF is the main part of the Just Transition Mechanism (JTM). It is implemented under shared management, under the overall framework of Cohesion policy, which is the main EU policy to reduce regional disparities.
The fund is equipped with 19.2 billion euros in current prices. This amount corresponds to fresh money made available to support EU countries in their green transition, out of which 7.5 billion euros will be financed under the EU’s 2021-2027 budget, while the remaining €10 billion will constitute external assigned revenue stemming from the European Recovery Instrument (and, as such, will be made available from 2021 to 2023).
Member States may transfer to the JTF additional resources from their budgets under the European Regional Development Fund (ERDF) and the European Social Fund Plus (ESF+). The total amount transferred should not exceed 3 times the JTF allocation. Spending from the EU budget can be supplemented by national co-financing according to Cohesion policy rules. The fund is expected to mobilise close to 30 billion euros in public and private investments.