Just Energy Transition Fund

Energy Cities shares its recommendations for the new funding instrument in the future EU budget


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Related legislative initiative

EU policies have been supporting the local energy transition for years with great success. The Intelligent Energy Europe programme, for example, financed the creation of local energy agencies between 2007 and 2013. Before that, the SAVE programme was crucial to build the capacity of municipalities in Eastern Europe on energy issues. In our initial review of the 2014-2020 EU funding period, we have analysed the new opportunities for funding the local energy transition offered not only by EU funds, but also by new financial instruments (e.g. EFSI). Energy Cities identified in this review a big gap for supporting new governance models and mobilisation of all actors in order to co-design transition strategies and to implement them successfully.

As recently summarised in the report ‘Governing missions’ [i] laying down the principles for innovation to drive the research agenda, the changes in policy governance will be the key for success if we want to reach climate neutrality. This applies at all levels and it is not yet supported, or only with fragmented and small programmes.

The outgoing EU Parliament had issued the call for the creation of a new EUR 5 billion Just Energy Transition Fund, whose objective would be to “address societal, socio-economic and environmental impacts on workers and communities adversely affected by the transition from coal and carbon dependence” in its interim report on the Multi-Annual Financial Framework (MFF) 2021-2027. This new funding instrument would also have to allocate sufficient resources “for the development of inclusive, local and just transition strategies, with the reconversion of sites and the creation of decent and sustainable jobs, together with reskilling and upskilling in clean processes and technologies based on renewables or energy efficiency solutions”.

What is still missing in the Just Energy Transition Fund’s scope is an overarching mission to drive a radical change in energy generation and environmental responsibility that result in a genuine power shift towards local communities in transition in all EU territories.

Taking this into account, we call for the Just Energy Transition Fund to:

  • Support the creation of decentralised energy clusters in all EU territories. The decentralised energy clusters are governed by the local communities in transition and follow the principles of “local resources first” (harvesting in a sustainable manner locally available renewable and energy efficiency solutions), local energy autonomy and civic-public partnerships (a new form of partnership that includes citizens and local authorities).
  • Support the establishment of “local energy transition committees”. This new governance scheme will take on different forms according to the local context, but should ensure that a clear strategy to reach 2050 climate neutrality with clear intermediary milestones is agreed by all actors. In addition to being an independent body to evaluate the implementation of targets, it should also be a place to engage all stakeholders and create new “project clusters” for all sectors.
  • Channel financial support to the entire strategy and ensure fairness between sectors, districts, and population segments. The transition will succeed by being inclusive, or it will fail.

What the EU Just Energy Transition Fund should deliver:

  • Locally anchored investment plans for the next decade, based on mapping potential, capacity building, the design of decentralised energy projects and local consumption, sustainable mobility plans and the development of a strong business case with the involvement of local stakeholders.
  • A renewed, adapted, local governance to implement these transition strategies, with the mobilisation of all stakeholders.

[i] by Mariana Mazzucato, June 2019