Thanks to the Just Transition Fund (JTF) Programme adopted by the Commission today, Czechia will receive €1.64 billion in EU grants to support the country’s efforts to phase out coal-fired power by 2033 and ensure a fair transition to climate neutrality.
The JTF will help, in particular, the Czech regions of Karlovarsky, Ústecky and Moravskoslezsky where there is a high concentration of carbon-intensive industries with 21,000 jobs linked to the coal and chemicals industry. The JTF will make sure that the climate transition will not leave anyone behind.
Executive Vice-President for the European Green Deal, Frans Timmermans, said: “Czechia is a country with a rich industrial tradition and a promising future. Together with the Modernisation Fund, the Czech Just Transition Plan will help deliver a fair transition to climate neutrality, especially for the people in Karlovasky, Ustecky, and Moravskoslezky regions. The European Commission is on Czechia’s side to work for a healthy, green, and fair future for the country.”
Commissioner for Cohesion and Reforms Elisa Ferreira said: “I welcome the approval of this ambitious plan for a new green future of Czechia. Cohesion Policy is already supporting the regional economy. Under the 2014-2020 programming period, it already supported investments in 11,000 enterprises, helping to retain or create 10,676 direct jobs. Karlovarsky, Ustecky and Moravskoslezky will now have at their disposal €1.64 billion to implement a just transition of their local economy. Together we will make sure that the climate transition in Czechia goes hand in hand with new opportunities for the concerned regions and their citizens.”
Mitigating the social impact of the climate transition
In Karlovarsky, over 1000 jobs are related to pollutant power generation activities. It is the least developed region in Czechia but has a potential for the development of small and medium businesses. To make sure the industrial transition in this region is benefitting everyone, the JTF will support entrepreneurs and human resources by helping to re- and upskill workers.
In Ustecky, 80% of Czechia’s lignite (or brown coal) is extracted. There are over 5000 coal-related jobs, four coal mines, the largest Czech coal fired power plants and a high concentration of chemical industry firms. The JTF will support investments to transform the economy into one based on renewable energy sources and a circular economy. Investments in research and development, including innovation platforms and clusters, are among the JTF priorities.
Moravskoslezsky is the biggest coal-mining region in Czechia with 5000 direct jobs in the sector. The region also faces several challenges related to the environment, especially air pollution, and groundwater contamination due to industrial activities. The JTF will therefore invest in decontamination and support the region’s coal phase-out. Investments are planned in the area of energy storage and energy research.
The JTF supports the territories most affected by the transition towards a climate-neutral economy. These territories are identified in Territorial Just Transition Plans (TJTPs) following a dialogue with the Commission in the framework of the negotiations of the 2021-2027 Partnership Agreements and the associated programmes. The TJTPs, developed in close consultation with local partners, set out the challenges in each territory, as well as the development needs and objectives to be met by 2030. They also identify the types of operations envisaged along with specific governance mechanisms.
The approval of TJTPs opens the door to dedicated financing under the other two pillars of the Just Transition Mechanism (JTM): a just transition scheme under InvestEU and the Public Sector Loan Facility for Just Transition that combines Commission grants with European Investment Bank loans.
The JTM is a key tool to ensure that the transition towards a climate-neutral economy happens in a fair way, leaving no one behind. It provides targeted support to help mobilise around €55 billion over the period 2021-2027 in the most affected regions to alleviate the socio-economic impact of the transition.
Upon request by the Czech Authorities, the Commission provided tailor-made technical expertise for the preparation of the TJTPs, consulting a wide range of stakeholders. The support was provided by the Technical Support Instrument.