A committee in the European Parliament approved this week a regulation on the establishment of a Just Transition Fund for supporting the socio-economic transition to climate neutrality by 2050. Against protests by environmental organisations, natural gas projects were included for support by the fund.
The regulation was approved by the Regional Development Committee on 6 July with 27 votes in favour, 7 against and 8 abstentions.
The committee requested a significant increase for the JTF to be allocated in the new EU budget for 2021-2027 and called for a co-financing rate of up to 85% of the costs for eligible projects to support the most vulnerable communities in each region. The establishment of the JTF should not lead to cuts to or transfers from the already existing regional funds.
The committee also agreed that the scope of the JTF should be broader, focusing specifically on social cohesion and leading to job creation.
The activities supported by the fund would also include microenterprises, sustainable tourism, social infrastructure, universities and public research institutions, energy storage technologies, low-emission district heating, smart and sustainable mobility, digital innovation, including digital and precision farming, projects fighting energy poverty, as well as culture, education and community building.
The original draft regulation stated (article 5) that the JTF should not support investment related to the production, processing, distribution, storage or combustion of fossil fuels as they would be contradictory to the long-term goal of climate-neutrality.
This was also the position of the European Commission. According to an official in the cabinet of Frans Timmermans, Executive Vice-President for the European Green Deal, natural gas was not included in its proposal for a just transition fund.
“To replace revenues, municipalities should invest in renewable energies. We don’t want to support investments in assets that will be obsolete in the future.”
The Commission explained that the just transition fund will focus on the social and economic costs of the transition in the most impacted regions. These are regions where many people work in coal, lignite, oil shale and peat production or that host greenhouse gas-intensive industries.
The most controversial amendment of the regulation is an exception for investments in activities related to natural gas in regions heavily reliant on the extraction and combustion of fossil fuels. The amendment was proposed by MEPs from countries that still are heavily depending on coal-fired power plants.
The derogation, however, is conditional on meeting a number of “cumulative conditions”. Natural gas should be used as “bridging technology”, contribute to EU’s environmental objectives on climate change mitigation and adaptation, through accelerating the full phase-out of coal, deliver significant reductions in greenhouse gas emissions and air pollution, and contribute to tackling energy poverty.
”Gas is a dead-end on the road to a just and climate-neutral Europe,” commented Katie Treadwell, Energy Policy Officer at WWF European Policy Office. “Throwing money at it risks worsening climate change, creating no lasting jobs, and wasting billions of Euros which could be invested in job-friendly, sustainable wind and solar power.”
She told The Brussels Times that, “Retrofitting coal power plants is simply locking in fossil fuel infrastructure. Pro-gas MEPs push for gas on the argument that gas is better than coal, but methane emission leaks mean it can actually be worse from a climate perspective. It is also important to remember that this is a fund to address the socio-economic impacts of the transition.”
62 NGOs including WWF and Climate Action Network Europe have urged all MEPs to vote against including gas in the fund. The final vote is expected to be taken by the European Parliament plenary during its September sitting.
The Brussels Times