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Summaries of EU Legislation

The Just Transition Fund

 

SUMMARY OF:

Regulation (EU) 2021/1056 establishing the Just Transition Fund

WHAT IS THE AIM OF THE REGULATION?

Regulation (EU) 2021/1056 sets up the Just Transition Fund (JTF), which aims to support the people, economies and environment of territories that face serious socioeconomic challenges stemming from the shift towards a climate-neutral European Union (EU).

KEY POINTS

  • The JTF aims to contribute to the single specific objective of enabling regions and people to address the social, employment-related, economic and environmental impacts of the EU’s transition towards its 2030 targets for energy and climate and its objective of a climate-neutral economy by 2050, based on the Paris Agreement (see summary).
  • It may also support investment contributing to the objectives of the strategic technologies for Europe platform (STEP) laid down in Regulation (EU) 2024/795.
  • The JTF is the first pillar of the Just Transition Mechanism, along with the InvestEU scheme and the Public Sector Loan Facility.
  • It is a key element of the European Green Deal (see summary).

Scope

The JTF supports sustainable investment in:

  • small and medium-sized enterprises (SMEs), including microenterprises and start-ups;
  • research and innovation activities, including those carried out by universities and public research organisations;
  • renewable energy and energy efficiency;
  • smart and sustainable local mobility, including decarbonisation of the local transport sector and its infrastructure;
  • the modernisation of district heating networks;
  • digital innovation and connectivity;
  • the rehabilitation of brownfield sites and green infrastructure;
  • the retraining of workers and jobseekers;
  • education and social inclusion, including investment in infrastructure for training centres, and care facilities for children and the elderly.

With the adoption of amending Regulation (EU) 2024/795 establishing the STEP initiative, the JTF may also support productive investment in enterprises other than SMEs, while preserving a focus on SMEs, contributing to the STEP objectives. These objectives are to strengthen the EU’s sovereignty and security, accelerate its green and digital transitions, enhance its competitiveness and reduce its strategic dependencies in three strategic industrial fields: digital and deep tech innovation, clean and resource-efficient technologies, and biotechnologies.

The financing of the following under the JTF is excluded:

  • the decommissioning or construction of nuclear power plants;
  • activities related to tobacco products;
  • investment related to fossil fuels;
  • companies in difficulty, unless authorised under temporary State-aid rules set up to address exceptional circumstances.

Resources

Access to funding

  • Access to JTF funding is dependent on the Member States committing to achieving climate neutrality by 2050.
  • Only 50% of the national allocation will be available to those Member States that have not yet committed to the target.

Green reward mechanism

  • If the JTF’s resources are increased after 31 December 2024, the additional resources will be awarded to Member States based on a ‘green reward’ mechanism.
  • This means Member States that reduce their greenhouse gas emissions at a faster rate will receive additional allocations.

FROM WHEN DOES THE REGULATION APPLY?

It has applied since 1 July 2021.

BACKGROUND

For further information, see:

MAIN DOCUMENT

Regulation (EU) 2021/1056 of the European Parliament and of the Council of 24 June 2021 establishing the Just Transition Fund (OJ L 231, 30.6.2021, pp. 1–20).

Successive amendments to Regulation (EU) 2021/1056 have been incorporated into the original text. This consolidated version is of documentary value only.

RELATED DOCUMENTS

Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy (OJ L 231, 30.6.2021, pp. 159–706).

See consolidated version.

Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, pp. 17–75).

See consolidated version.

Commission Implementing Decision (EU) 2021/1129 setting out the annual breakdown of available allocations under the Just Transition Fund per Member State (OJ L 244, 9.7.2021, pp. 4–9).

Council Regulation (EU) 2020/2094 of 14 December 2020 establishing a European Union Recovery Instrument to support the recovery in the aftermath of the COVID-19 crisis (OJ L 433I, 22.12.2020, pp. 23–27).

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – Sustainable Europe Investment Plan – European Green Deal Investment Plan (COM(2020) 21 final, 14.1.2020).

Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions – The European Green Deal (COM(2019) 640 final, 11.12.2019).

Paris Agreement (OJ L 282, 19.10.2016, pp. 4–18).

Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC (OJ L 275, 25.10.2003, pp. 32–46).

See consolidated version.

last update 09.10.2024

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