Brussels – The European Commission has published details of a Just Transition Mechanism and Green Deal Investment Plan, which will mobilise EU funding for the transition to a green, competitive and inclusive economy.
The Investment Plan aims to obtain €1 trillion of investments, and has three dimensions:
- Financing: a greater share of the EU budget than ever will be dedicated to climate and environmental action.
- Enabling: the EU will provide the necessary tools in order for investors to put sustainable finance at the heart of the financial system, including through green budgeting and procurement.
- Practical support: the Commission will assist authorities and project promoters in planning, designing and executing sustainable projects.
The Just Transition Mechanism will provide €100 billion in financial and practical support in order to support the regions relying most on the fossil fuel value chain.
The JTM consists of three pillars:
- a Just Transition Fund (JTF) of €7.5bn of new money on top of the commission’s existing EU budget proposal. The fund will be established within the framework of EU cohesion policy but Member states will have to complement JTF with funding through their European Regional Development Fund and European Social Fund+. Member states will be required to prepare territorial just transition plans, on which JTF support will be based.
- a just transition scheme under the strategic investment programme InvestEU to mobilise up to €45bn of investments.
- a public sector loan facility with the European Investment Bank backed by the EU budget to mobilise between €25bn and €30bn of investments.