EU links €40bn to phasing out solid fossil fuels

26 June 2020 | Trading

EU member states have agreed on a draft legal text linking a proposed €40bn regional recovery programme to phasing out solid fossil fuels, including coal, lignite, peat and oil shale.

The final legal text governing use of funds under a so-called "just transition fund" still needs to be agreed with the European Parliament. The fund aims to assist vulnerable regions and sectors with their transition to a climate-neutral economy.

Parliament's environment committee has discussed the provision of limited transition aid to firms in the solid fuel industries that commit to closing their operations within a "reasonable timeframe".

But the council's text does not specify a timeframe for phasing out industries in the solid fossil fuels sector. But financed projects should contribute to a transition to a climate-neutral and circular economy. And funding for the decommissioning or construction of nuclear power stations is excluded.

"For declining sectors, such as energy production based on coal, lignite, peat and oil shale, or extraction activities for these solid fossil fuels, support should be linked to the phasing out of the activity and the corresponding reduction in the employment level," the council said.

In May, the European Commission announced that it will advise 18 member states in preparing territorial plans under the just transition fund. The commission also proposed raising the budget for the fund in the EU's long-term budget for 2021-27 from €7.5bn to €40bn.

Source: Argus