On June 25, 2020, a note has been issued from the General Secretariat of the Council of the European Union to the Permanent Representatives Committee regarding the proposed Regulation establishing the Just
Transition Fund (JTF).
The European Commission is seeking to establish the €40 billion Just Transition Fund, made up of €30 billion from an EU coronavirus recovery fund and €10 billion euros from the Commission’s budget for 2021-27.
The JTF aims to provide support to the economies, people, and the environment of regions facing serious socio-economic challenges deriving from the transition process towards the Union’s 2030 target for climate set
out in Article 2(11) of Regulation (EU) 2018/1999 and a climate-neutral economy of the Union by 2050.
Ambassadors from the EU’s 27 member states agreed on Wednesday that the Just Transition “shall not support the decommissioning or the construction of nuclear power stations” nor “investment related to the production, processing, distribution, storage or combustion of fossil fuels”.
The Regulation establishing the Just Transition Fund (JTF Regulation) was presented to the Structural Measures Working Party (SMWP) on 21 January 2020, during the Croatian Presidency. Detailed examination of the JTF Regulation by the SMWP followed during February and March. The JTF Regulation is a proposal linked also to the Multiannual Financial Framework and the European Union Recovery Instrument.
Article 5 of the Regulation establishing the Just Transition Fund, referring to the exclusions from the scope of support, stipulates that the JTF shall not
– the decommissioning or the construction of nuclear power stations
– the manufacturing, processing, and marketing of tobacco and tobacco products
– undertakings in difficulty, as defined in Article 2(18) of Commission Regulation (EU) No 651/20145, unless authorized under applicable
Union State aid rules
– investment related to the production, processing, distribution, storage or combustion of fossil fuels
– investment in broadband infrastructure in areas in which there are at least two broadband networks of equivalent category.
The decision brings member states in alignment with the European Commission, making it likely that the final Just Transition Fund will formally exclude nuclear and gas. This proposal will be finalized following
negotiations between EU member states, the European Commission, and the European Parliament.
Parallel to the JTF, the same issue regarding nuclear power is addressed in the EU Green Finance list, known as the Taxonomy.
The EU Taxonomy aims to help market participants ensure they invest in green opportunities that align with the Paris Agreement on greenhouse-gas emissions, and don’t fall foul of ‘greenwashing’ attempts. As a corner stone of the European Commission’s Sustainable Finance Action plan, it is expected to support new regulations, notably requiring investment firms to
clarify the ‘greenness’ of their investment strategies using a common language.
The nuclear industry and certain EU member states are opposing the concept that nuclear, along with fossil energies, is not recommended by the Technical Expert Group working on the Taxonomy to be included in it.