Energy 8 May, 2020 10:00 am   
COMMENTS: Mateusz Gibała

CEEP: Just Transition Mechanism and its importance for Central Europe energy transition

The first CEEP Report in 2020 focuses on the Just Transition Mechanism (JTM) and Fund (JTF) which are a tool of support for the regions and sectors most affected by the transition. We present in this edition a variety of voices from Brussels and the Central European region how it should be structured and designed.
In the opening statement ELISA FERREIRA, COMMISSIONER FOR COHESION AND REFORMS, acknowledges the need to act quick in the current situation of the COVID-19 outbreak. This means also, that there has to be a long-term approach in order to handle the socio-economic impact. Europe needs a strong growth strategy – European Green Deal – to face the economic challenges that have not disappeared. In her opinion, JTM will play an essential role in implementing the strategy to resume growth while replacing the present fossil fuel-intensive economic model of the past.

POLISH MINISTER OF CLIMATE MICHAŁ KURTYKA writes that Poland is eager to demonstrate solidarity with other EU countries to achieve climate neutrality, however, the unique characteristics of the Polish energy system and economy have significant influence on the possibilities to act. “The scale of the challenges faced by Poland is incomparably greater than in other EU countries” he states. Nevertheless, Poland wants to transform the energy sector and economy: “We want to change our energy mix. We want to produce more energy from renewable sources, which we will supplement with low-carbon sources in conventional energy” however „we can’t forget that we are joining the transition from a completely different starting point than other countries”.

Many Central European countries are still dependent on coal in their energy mixes, that is why the Coal Regions in Transition Platform proved to be so much more than a knowledge-sharing tool. CATHARINA SIKOW-MAGNY DIRECTOR in DG ENERGY supervises the initiative and says, that it ‘opened up a public debate in places where dialogue had been impossible for years. It established a real sense of community among the stakeholders, both at an EU level and within specific EU coal regions’. The platform is growing, as already 20 of the EU’s 31 coal-dependent regions are part of it and the focus will be expanded to regions dependent on other solid fossil fuels.

The person behind the idea of the initiative of JTF, JERZY BUZEK, MEMBER OF THE EUROPEAN PARLIAMENT underlines the importance of a bigger fund to tackle all the challenges facing the regions. Coal dependent regions usually have a lower GDP per capita than the EU’s average, they also have different starting points in terms of energy transition. He stresses, that ‘it should by no means lead to any cuts in other EU instruments and policies. It has to become a separate budget line in the next 4-5 MFFs, until at least 2050’.

JULIAN POPOV describes the potential of developing low carbon industrial clusters in coal regions in order to absorb, retain and expand this valuable expertise which otherwise could be dispersed and lost. He indicates that the labour force in mining regions composes of highly skilled engineers and technicians, who could be working with renewable energy installations.

MACIEJ JAKUBIK from CEEP outlines problem of costs of the energy transition and a need to allocate more sources from EU budget. He argues, that an increase of climate ambitions should be matched by an increased budget – ‘in other words, the size of the JTF should be adequate to for the challenges ahead’.
The JTF is a political tool to reach an agreement between the Commission and CEE Member States writes NOLAN THEISEN from GLOBSEC. The funds will not be enough to achieve the ambitious targets, that is why ‘solidarity must prevail to make the grand deal on Europe’s climate future’.

In a series of articles, our partners and experts discuss the specificities of the CEE countries and their approach to the energy transition. REMIGIUSZ NOWAKOWSKI and ALEKSANDRA PINKAS describe the conditions under which Poland can benefit the most from The Just Transition Fund. In turn, KAMIL MOSKWIK explains how ‘the cost of the energy mix transformation will be one of the most significant challenges for the Polish economy over the next few years’.

‘The Slovak transition can serve as a blueprint for much larger projects of just transitions in Germany and Poland, argues MATÚŠ MIŠÍK. Therefore a detailed process of just transition in Slovakia can provide the EU with valuable lessons of what to do (and what not to do) when transforming the EU’s coal regions.

The calculations of costs for Romania to carry the transition until 2030 is between EUR 15 and 30 billion, as presented by CORNELIU BODEA and MIHAI MACARIE. Additionally, to mitigate social impact of the changes an increase of these estimates will be necessary, to make sure that “no one is left behind”.

OLIVIER MARQUETTE argues that high carbon and energy intensity of Bulgaria’s economy and its dependence on coal power will require significant transition efforts. „It is therefore essential that the transition towards a climate-neutral market takes place gradually, without jeopardising the security of supply – a key focus for Bulgaria and the SEE energy market”.

To see the bigger picture of energy transition ALINA SULOWSKA from CEEP describes the German approach, where the national budget for this purpose is much higher than the JTF. ‘The biggest economy in the EU will spend more than EUR 44 billion on coal phase-out in the period 2020-2038.

We also recall the Joint Statement on the Just Energy Transition Fund presented by five energy associations from the region (CEEP, CRE, NEC, NLEA, ETL) in January this year, where we claimed for a robust and efficient mechanism of support of energy transition.

Last but not least, to show that challenges are the same around the world, we publish “Solidarity and Just Transition Silesia Declaration” adopted during COP 24 in Katowice in December 2018.