Structural change in coal phase-out regions

On Wednesday 16 September, the European Parliament adopted with an overwhelming majority its position on the Commission’s proposal on the Just Transition Fund. The Parliament asks for an increased budget (up to 25 billion EUR) and to broaden the types of potential beneficiaries and its scope to also include investments related to natural gas, “for regions heavily reliant on the extraction and combustion of coal, lignite, oil shale or peat if they qualify as “environmentally sustainable”. The parliament also proposes a number of measures like the creation of a “Green awarding mechanism, special allocation for the islands and outmost regions.

ESPON evidence on structural change in coal phase-out regions presented to the member states

On the same day, the ESPON EGTC introduced its work on structural change in coal phase-out regions to the Network of Territorial Cohesion Contact Points (NTCCP). This work is commissioned by the German Presidency of the Council of the European Union and is strongly relating to the investment actions proposed by the JTF. ESPON had embarked on efforts to advance the current policy-research discourse through territorial evidence (see graph).  



As ESPON project expert Vassilen Iotzov explained, it is important for regions to prioritize investments based on their needs, weaknesses and strengths in relation to knowledge stock and entrepreneurial ecosystem. These two parameters can give an indication where investments under a certain JTF type of action can maximize output and further spending becomes inefficient. Regions can determine and optimize their spending in terms of R&D intramural investments (including capital investments in universities and research facilities), productive investments and firm incubation. 

These two parameters, knowledge stock and the entrepreneurial ecosystem, also explain the variance in diversification potential across coal phase-out regions, stressed Vassilen Iotzov

Efficiency in R&D and firm investments funded by the JTF will have a positive moderating effect on the social cohesion targets of the Fund. While the later remains a pan-European challenge, the number of job losses and the need to offset the social and economic challenges vary significantly across coal-dependent regions, as outlined by Martin Gauk of the ESPON EGTC.



Next legislative steps 

Inter-institutional negotiations (trialogue) are expected to start as soon as possible, on all matters except for the financial envelope, which is to be agreed upon in parallel talks on the Multiannual Financial Framework (MFF).