Opinion of the European Committee of the Regions – A Just Transition for all EU regions
Date: 2024-10-08
Institutions: Commission for Territorial Cohesion Policy and EU Budget, European Committee of the Regions
Subjects: EU regional policy, adaptation to climate change, circular economy, economic and social cohesion, energy transition, environmental impact, fund (EU), green economy, regional development, security of supply








C_202407058EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2024/7058


4.12.2024






Opinion of the European Committee of the Regions – A Just Transition for all EU regions
(C/2024/7058)














Rapporteur



:


Marco MARSILIO (IT/ECR)
President of Abruzzo region









POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS (CoR),








1.


points out that the energy transition, coupled with ongoing geopolitical crises and tensions, if not supported by adequate investment and properly governed and sustained with a strong propensity to innovation and industrial research, might pose significant risks to the competitiveness and resilience of European economies, with specific threats to industrial sectors exposed to international competition;












2.


stresses that while climate change challenges and concerns are intensifying, the global geopolitical and economic context has also changed dramatically since the European Green Deal was initially proposed in 2019; notes that the Russian invasion of Ukraine, and the subsequent Middle East conflict, respectively, have highlighted the need for the EU to move towards greater energy independence, and have also weakened Europe’s industrial and trade competitiveness. For these reasons, welcomes the fact that the attention of national governments and European institutions has increasingly shifted to guaranteeing energy security alongside achieving the green transition, which includes safeguarding critical networks and assessing the economic and social conditions underpinning the transition process. In this context, the European Committee of the Regions confirms the importance of maintaining the ambition of the European Green Deal but stresses that this must go hand in hand with economic competitiveness. Calls for better involvement of local and regional authorities in the design of climate and energy policies, thereby ensuring a more pragmatic and flexible approach to reducing the EU’s energy dependence on the rest of the world and strengthening the industrial and commercial competitiveness of our continent, guaranteeing sustainable prosperity and well-being for Europeans and the diverse territories across Europe;












3.


stresses that the European Union is facing a twin transition towards digitalisation and decarbonisation, which is having both profound repercussions and potential opportunities on the way in which we live, work and do business. This is combined with the demographic crisis which seriously jeopardises the promotion of the objectives set out in the Treaties in terms of economic, social and territorial cohesion;












4.


notes that the EU’s consequential transition to a sustainable, climate-neutral economy has increasingly profound challenges for Europe’s regions, workers, industries and society at large. Especially in regions dependent on fossil fuels and energy-intensive industries, it poses a significant challenge for the traditional economic and social base of many territories; this aspect should be taken into account in the next programming period, in particular in the next cohesion policy, highlighting the critical need for sustainable and feasible alternatives to transition to a climate-neutral economy and to exploit and adequately support the opportunities that come with it;












5.


stresses that not all territories begin from the same starting point and that they have different strengths, vulnerabilities and administrative capacities to address the twin transition; calls, therefore, for specific and targeted actions to support the most vulnerable areas on the basis of neutral indicators, defined at European level, which may include all types of transition-related challenges, from coal regions to automotive regions and others;












6.


calls for the development of targeted support mechanisms for less developed regions that specifically address their unique challenges and opportunities in the twin transition towards digitalisation and decarbonisation. These mechanisms should include tailored training programmes for local stakeholders to enhance their administrative capacities and readiness for the transition, and should be designed in close consultation with local authorities to ensure they meet the specific needs of these regions;












7.


underlines the importance of proactive measures to mitigate the impacts of climate change and environmental degradation, given the economic losses and social disruption from natural catastrophes. This is vital for ensuring the sustainable transition of industries, as decisive action is essential to prevent disastrous consequences for the economy and society in the long-term;












8.


highlights that the issue of job losses in energy-intensive industries, such as coal, peat and lignite mining, large-scale production and fuel production and processing, as well as the transformation and diversification of these regions that are already in transition, is the most immediate challenge due to the number of people employed in these sectors, since the transition, which has already had a considerable impact on the economic reality of these territories, will not be completed by 2027. In this context, points out that renewable energy technologies are becoming a dynamic area for investment and employment, leading to new jobs also in related sectors, such as construction and manufacturing;












9.


emphasises the importance of integrating reskilling and upskilling initiatives into the transition plans for energy-intensive industries. These initiatives should include partnerships with educational institutions and vocational training centres to provide relevant skills and qualifications for workers displaced by the transition. Special focus should be given to creating pathways for young people to enter emerging green sectors and industries, ensuring that they are equipped with the necessary skills to thrive in the evolving job market;












10.


reiterates that a transition approach based on technology neutrality, with low carbon and renewable technologies available at its core, and stimulating investment in the circular economy, combining environmental protection, security of supply and territorial competitiveness and resilience, should be promoted; reiterates its call to take into account the cost-effectiveness and technological neutrality in achieving greenhouse gas emission reductions and removals and increasing resilience in order to ensure the most appropriate and suitable technology for the regions’ needs while keeping a stable, reliable and diverse energy system with costs viable for citizens (1);












11.


considers an integrated and gradual approach in energy transition policies to be a priority. Calls, therefore, for an assessment of the optimal time frames and extra economic resources needed to achieve the energy transition targets, including for renewable energy;












12.


considers that this approach will allow the companies, consumers and industrial sectors concerned foresight to plan and adapt sustainably and to minimise negative impacts on the European production system which could undermine and disrupt market rules;












13.


considers that the energy transition, managed and addressed in a balanced way through synergies between the public and private sectors, can be an opportunity for innovation and competitive development for European industry, which will have to compete with other economies;












14.


stresses the need to invest in ex-ante territorial impact assessments and sustainability analyses that effectively demonstrate the social, environmental and economic benefits of the transition;












15.


considers it essential to view Europe’s emissions in a global context and reaffirms the importance to continue working together internationally to effectively tackle climate change, overcoming any tendency towards isolationism. Europe is a world leader in reducing emissions, which must not jeopardise its industrial capacities.





Identifying the appropriate funding instruments to ensure a just transition for all EU regions









16.


notes, in this context, that the Committee of the Regions has already called for extending the scope of the Just Transition Fund 2021-2027 to include other sectors in transition, as well as the regions which, due to their socio-demographic characteristics and their productive structure, have a very low production-consumption ratio, resulting in large deficits. These circumstances must be taken into account to ensure effective energy resilience of European regions; also notes that the transition of the current regions under the Just Transition Fund has not been completed and that they will continue to need differentiated support in the future; calls, in this regard, for a just transition to become an essential part of a reformed cohesion policy that focuses on anticipating change, supporting those regions facing the transformation of the most strategic, energy-intensive, greenhouse gas-emitting and labour-intensive industries, including those related to the transformation of the automotive and component supply industries;












17.


calls on the Commission to reduce the fragmentation of funds in the next Multiannual Financial Framework (MFF) post-2027 and to provide more clarity on the respective competences of each policy and its funding instruments; stresses that any future EU fund supporting the competitiveness of European industry should be founded on a place-based approach and supports the idea that all funds participating in the financing of just transition strategies be based on a common strategic approach, updated quality data and analyses and full stakeholder participation in the process;












18.


highlights the complexity of the approval procedures for the just transition plans and points out that the majority of regions are encountering problems in the timely planning and implementation of projects, due to the fact that most of the total funding available, coming from the Recovery and Resilience Facility, has been programmed for the period 2021-2023, providing few opportunities for sustainable implementation of projects towards the end of the programming period; regrets that the amended national programmes – following the introduction of REPowerEU – are still being assessed by the European Commission, and therefore calls on the Commission to consider extending the spending deadline for the Just Transition Fund (JTF) resources financed by NextGenerationEU;












19.


stresses the importance of other instruments that can help achieve a just transition, such as State aid and national programmes, and refers in this context to the proposals presented in the Letta report to mitigate potential distortions of the level playing field in the single market;












20.


stresses that the Just Transition Mechanism (JTM) was designed as an instrument more limited in scope than traditional structural funds and that some of its objectives overlap, for example, with the European Regional Development Fund (ERDF) and the European Social Fund Plus (ESF+). Notes, therefore, that the Just Transition Fund could be integrated within the same regulations, into the ERDF or the ESF+ as an additional allocation, specific and differentiated, for regions that need it, provided that the financial allocation remains intact or is increased, so as to ensure that the JTF does not lose its specific nature and characteristics; this would help to avoid a loss of industrial competitiveness and foster the reskilling and upskilling of the skills of workers in transition regions;












21.


notes that another innovation of the Just Transition Mechanism was to combine various management modes (shared, direct and indirect) into one mechanism and to introduce a new fund – the Just Transition Fund, which has brought about some challenges in reconciling different timetables, operation and stakeholders; recommends, therefore, that any future mechanism should be based on and draw lessons from the systems and governance established in the 2021-2027 period, rather than starting again from scratch, and that attention should also be paid to the possibility of abandoning one part of the mechanism, should it prove too slow or lead to duplication; stresses that the proposal to integrate the future Just Transition Fund into the ERDF and ESF+ regulations could address some of these issues;












22.


requests the implementation of a stronger social and demographic component in the forthcoming programming of just transition funds, involving strong involvement of the social and regional partners, and advocates keeping the bottom-up approach as the key element, as each region represents a unique socio-economic ecosystem.












23.


calls on the European Commission to present a proposal to ensure a robust cohesion policy in the future. This new cohesion policy will have to include a strong transition component and bonus allocations, in addition to the ordinary cohesion policy allocations, to support transitioning regions that are dependent on strategic greenhouse gas-intensive industrial sectors with a large pool of specialised workers (such as the automotive industry);





Ensuring the EU’s energy resilience









24.


notes that achieving the joint net zero emissions target by 2050, addressing the energy crisis and increasing the Union’s energy security go hand in hand, especially as regards safeguarding critical infrastructure; notes that the development of the EU’s renewable energy sources and cross-border interconnections between EU Member States’ energy networks are crucial steps in this regard;












25.


recognises the importance of electricity distribution networks as a key element in supporting the transition. Given the increasing use of electricity in several sectors, it is essential to ensure more resilient distribution networks able to withstand climate change and extreme operating conditions. In this context, hosting capacity and digitalisation of networks are crucial to better integrating renewable sources and enhancing the reliability of the energy service;












26.


highlights the importance of promoting the production of renewable energy, particularly through decentralised and local renewable energy systems. This approach enhances energy security, and opens new economic opportunities, particularly benefiting rural areas, and allows citizens more control over their energy sources and prices as well as granting them profits.












27.


recalls that the Committee has already called for freedom of choice in the pathway towards decarbonisation at local level to be ensured from a technological, political and democratic perspective (2); stresses the importance of enabling and promoting a variety of different solutions, taking into account technological developments and the different circumstances in the EU’s regions in terms of climate, geography, infrastructure and energy systems (3); following the principle of technological neutrality, with low carbon and renewable technologies available at its core, the European Commission should promote technology competition, as well as alternatives for rural and remote areas, such as advanced biofuels (4), which should be carbon neutral from their production to their utilisation, so that local and regional authorities, which play a pivotal role in designing, implementing, financing and monitoring integrated and comprehensive solutions, can choose from all available technologies to implement decarbonisation. Believes, furthermore, that low-carbon and renewable technologies can help foster rapid innovation, fair results and coordinated action across sectors, even though they should not, as things stand, be seen as the only way to deliver energy in a secure and reliable way and more investments are still needed;












28.


considers it important to strengthen energy storage systems, such as, for example, pumped storage power plants, in order to avoid network congestion and ensure the stability and continuity of the electricity grid given that renewable sources are subject to production variability; emphasises the importance of bidirectional charging and calls for accelerated promotion of charging stations. Stresses, furthermore, that the creation of a renewable hydrogen economy can help integrate the energy mix and decarbonise energy-intensive industrial activities, heavy transport and urban areas, while at the same time creating new job opportunities, especially in carbon-intensive regions and cities;





Creating the conditions for a just transition of the EU’s energy-intensive industries









29.


stresses that the decision to reach climate neutrality in the EU by 2050 entails asymmetric territorial impacts, especially in regions with energy-intensive industries and other sectors, resulting in job losses and the need to radically change the economic and development model in those regions. These structural changes need to be addressed with specific EU support to ensure a fair transition, including continued support to regions currently in transition;












30.


points out that the basis for an innovative and well-functioning energy and mobility transition is the market readiness of products that have not yet fully tapped their development potential; highlights that applied, industrial research is a key building block in the development chain, culminating in approval and market uptake, and stresses the importance of research carried out via international networks in finding responses to complex crises with multiple facets;












31.


highlights the vulnerable situation of regions with isolated systems that cannot be connected to the European network. These include certain islands and outermost regions that are dependent on the outside world and where investments are needed to make the energy transition to new forms of clean energy. Recalls that particular support should be given to them given their serious socioeconomic challenges deriving from the process of transitioning towards the EU’s 2030 targets for energy and climate and a climate-neutral economy in the EU by 2050, having regard to their specific needs as recognised in Articles 174 and 349 TFEU. Furthermore, calls for a comprehensive impact assessment of the rules on emission reductions by 2030 and climate neutrality in 2050 in these regions;












32.


notes that Europe has made a significant reduction in passenger car emissions key to its climate strategy, banning the sale of new combustion engine vehicles by 2035, which is leading to rapid and challenging transformations in the European automotive industry; stresses that the development of climate neutral biofuels from bio-waste offers a promising opportunity – which the EU cannot afford to ignore – to accelerate the decarbonisation process, especially given the good level of compatibility with internal combustion engines. The production process of new generation biofuels, which should be carbon neutral from their production to their utilisation, allows bio-waste to be converted into a renewable energy source, helping to reduce carbon emissions, providing a sustainable alternative to traditional fuels and preventing biodiversity loss or increased pollution. Furthermore, the use of bio-waste can reduce the need to devote agricultural land to biofuel production, thus mitigating land use; reiterates the call by Mario Draghi in his Report on the Future of European Competitiveness (5) that the review of the CO2 fleet emission regulation and of the Alternative Fuels Infrastructure Regulation should follow a technologically neutral approach and should take stock of market and technological developments, and consider an assessment of the potential and competitiveness of carbon-neutral fuels;












33.


highlights the vitality of the automotive sector to the EU economy – as also described in the Draghi Report (6) – which provides direct or indirect employment to 13.8 million Europeans and accounts for 7 % of EU GDP (7); welcomes, therefore, the provisional countervailing duties imposed by the Commission on imports of battery electric vehicles from China as a response to unfair state subsidies, which could both threaten the continuity of this crucial sector in Europe and compromise Europe’s technological sovereignty;












34.


stresses that the development of climate neutral biofuels from bio-waste is an advantageous opportunity – which the EU cannot afford to ignore – to accelerate the decarbonisation process, especially given the good level of compatibility with internal combustion engines. The production process of new generation biofuels allows bio-waste to be converted into a renewable energy source, helping to reduce carbon emissions and providing a sustainable alternative to traditional fuels. Furthermore, the use of bio-waste can reduce the need to devote agricultural land to biofuel production, thus mitigating land use;












35.


notes that various manufacturing and market-driven challenges could make it hard for European car manufacturers to reach the stricter CO2 emission targets for their fleets to come into effect in 2025 (93,6g/km instead of 115,1g). In order to allow more time to reach conditions to boost production of zero-emission vehicles and to allow car-makers to overcome the current fall in market share of zero-emission vehicles, we urge the European Commission to consider a more gradual approach and consider an earlier review of the relevant legislation, still in 2025, to provide European automakers with sufficient time to adjust;












36.


notes that an additional risk factor is linked to the substantial Chinese control of the supply chains involved in the energy transition, ranging from around 80 % for photovoltaic to 76 % for batteries, with the prospect of shifting from our energy system’s historical dependence on fossil fuels to the supply of green technologies. The EU must prioritise creating its own raw material supply chain, investing in sustainable practices and circularity of critical materials, and drastically reduce costs for consumers, or it will risk depending almost exclusively on imports from third countries; underlines the importance of fair trade and high environmental standards in trade agreements with third countries;












37.


reiterates the need to promote and encourage investment in order to increase the competitiveness, sustainability and resilience of European industrial supply chains for the supply of critical raw materials from waste electrical and electronic equipment (WEEE), in order to avoid an environmental impact on those territories that have such waste or are now the final disposal point. At the same time, it will be important to ensure that the environmental and social rights of communities in countries exporting critical materials are respected;












38.


calls, furthermore, on Eurostat to estimate the net job losses and the potential for new jobs in Greentech, renewable energies and innovative technologies that will result from the green and digital transition in all sectors and industries (such as automotive); calls on the Commission to present the necessary proposal to ensure that the just transition continues to be taken into account in the next programming period and to allocate sufficient and additional funds to include support for regions facing the transformation of the most strategic, energy- and labour-intensive, greenhouse gas-emitting industries, including those related to the transformation of the automotive and component supply industry;












39.


calls for the funding for the just transition to be accompanied by attractive EU co-financing rates in the next programming period, so as not to place an excessive burden on the public budgets of transition regions that avail of these funds;












40.


notes, in this context, the legal obligation imposed on the European Commission by Regulation (EU) 2023/851 of the European Parliament and of the Council (8) to submit, by the end of December 2025, a report on progress made to ensure a just transition in the regions most affected by the transformation of automotive supply chains, covering funding gaps and proposals for adequate financial measures, and notes that this should be done in close cooperation with the Committee of the Regions’ Automotive Regions Alliance;












41.


believes that the just transition plans for transition regions should consistently follow a place-based approach and be managed by the competent authorities based on the principles of partnership and multi-level governance, while incentivising the interregional and transnational approach as part of cross-border cooperation between transition regions;












42.


welcomes the initiative of the European Commission to set up a European Fair Transition Observatory as a first step to provide important data and evidence for assessing the transition challenge; highlights however the limited territorial focus of this Observatory so far that is needed for capturing the extent of this transition at local and regional level. Therefore calls for a strong focus on mapping the just transition in close collaboration with all relevant Commission services and for integrating the work of the observatory in the already existing Just Transition Platform;












43.


notes that the chemical industry and all other activities in transition, such as those linked to the transformation of the most strategic, energy- and labour-intensive and greenhouse gas-emitting industries, can effectively respond to Europe’s social challenges with sustainable and innovative solutions if their economic development is linked to territorial development;












44.


considers it a priority in the transition process, therefore, to support multi-level governance, which is an essential condition for effectively linking the aims and objectives of the EU’s chemical strategy to the green recovery of the European economy;












45.


calls on the Commission to include the agricultural and livestock farming sector in those to be considered in the Just Transition Mechanism. Climate and geopolitical changes, as well as the adoption of healthy lifestyles, are inevitably shaping the development of a sector vital to the European economy towards more sustainable production, which must take into account the promotion of sustainable and typical local produce. This process requires technological investment and substantial financial resources for the training of employees, which cannot be earmarked solely as part of regional rural development programmes; Extensive and organic farming practices should be integral to this transition;












46.


notes that investment in digitalisation is crucial for the future competitiveness of European industries and SMEs;












47.


calls on local and regional authorities to explore, in the short term, the possibility of a mid-term review of the 2021-2027 cohesion policy programmes to support the transition of energy-intensive sectors, and calls on the European Commission to provide the necessary support to make the required adjustments;












48.


notes that the current Just Transition Mechanism is implemented via both grants and financial instruments; stresses that, given the significant funding requirements associated with the just transition, it will remain crucial to maintain an approach that maximises the use of innovative financing instruments and attracts private sector involvement, while safeguarding the use of grants for investments that do not generate revenues or savings.





Mitigating the impact of the transition on Europeans









49.


considers that energy consumption needs to be developed by rolling out residential renewable technologies and local energy communities in order to involve individuals in the transition process;












50.


notes that an energy transition plan must be devised for the most vulnerable households, which are at risk of being hit hard by the high costs of sustainable energy models in the transition process;












51.


stresses that it is crucial that this transition leaves no one and no region behind. This should be achieved by promoting local solutions and encouraging people to get involved in order to reach the climate goals and strengthen both resilience and democratic participation;












52.


points out that in order for the energy transition to be effective it must be underpinned by specific technical expertise, which requires a critical analysis of the training offered both to young people taking up their first job and to workers who will have to look for a new one. At the same time, steps must be taken to ensure that there is a genuine focus on content and specialisations which may be available in high schools, technical institutes and universities but which lack effective attention and practical support;












53.


calls for the establishment of an additional allocation to relevant funds aimed at supporting young people in less developed regions. This fund would provide grants and incentives for educational institutions to offer specialised training programmes in green technologies and sustainable practices. It would also support internships, apprenticeships, and career development opportunities in green sectors to ensure that young people are prepared for the jobs of the future and can contribute to the green transition.






Brussels, 8 October 2024.


The President


of the European Committee of the Regions

Vasco ALVES CORDEIRO
               





(1)  Opinion of the European Committee of the Regions — UNFCCC COP28: the role of subnational authorities in keeping climate ambition on track (OJ C, C/2023/1323, 22.12.2023, ELI: http://data.europa.eu/eli/C/2023/1323/oj).

(2)  Opinion of the European Committee of the Regions — Stepping up Europe’s 2030 climate ambition towards COP26 (
OJ C 440, 29.10.2021, p. 25).

(3)  Opinion of the European Committee of the Regions — Stepping up Europe’s 2030 climate ambition towards COP26 (
OJ C 440, 29.10.2021, p. 25).

(4)  Opinion of the European Committee of the Regions – Towards zero emission road transport: Deploying alternative fuels infrastructure and strengthening CO2 emission performance standards (
OJ C 270, 13.7.2022, p. 38).

(5)  
            https://commission.europa.eu/topics/strengthening-european-competitiveness/eu-competitiveness-looking-ahead_en.

(6)  
            https://commission.europa.eu/topics/strengthening-european-competitiveness/eu-competitiveness-looking-ahead_en.

(7)  
            COTER study ‘State of play and future challenges of automotive regions’, 2024.


(8)  Regulation (EU) 2023/851 of the European Parliament and of the Council of 19 April 2023 amending Regulation (EU) 2019/631 as regards strengthening the CO2 emission performance standards for new passenger cars and new light commercial vehicles in line with the Union’s increased climate ambition (OJ L 110, 25.4.2023, p. 5).


ELI: http://data.europa.eu/eli/C/2024/7058/oj
ISSN 1977-091X (electronic edition)