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Special allocations for coal regions should not divert money from regional policy  

Support from the Just Transition Fund should be channelled through programmes of the cohesion funds

Coal-producing regions should receive money from the European Union to support their move away from fossil fuels, the European Committee of the Regions said on 9 October. However, the EU's assembly for local and regional leaders insisted that support should not be at the expense of other regions.

The call by local and regional leaders combines support for special measures to aid several dozen regions with a defence for the EU's budget for regional development, which some EU national leaders wish to see cut substantially. The European Commission has proposed both a reduction in cohesion funds for regional development, and the creation of a Just Transition Fund for coal regions. Günther Oettinger, the European Commissioner for Budget and Human Resources, speaking at a summit of coal regions at the CoR on 9 October, reiterated the message that the Just Transition Fund should supplement cohesion funds, saying: "We need to find 'fresh money'."

The opinion by the European Committee of the Regions was drafted by Mark Speich (DE/EPP), Secretary of State for Federal, European and International Affairs for the German State of North Rhine-Westphalia. The opinion was adopted unanimously.

Mr Speich said: "Climate change is a challenge for the whole of Europe. The transformation of coal regions is a crucial contribution to achieving our climate goals. The EU therefore has to support coal regions in transition. The EU should provide financial support for the socio-economic transition of coal-mining regions in the next Multiannual Financial Framework. In order to stimulate new investments we also need sufficient room for manoeuvre for the regions with regard to competition policy rules."

He continued: “I appreciate the Commission President-elect's proposal for a Just Transition Fund. This fund must be designed to mitigate the social, socio-economic and environmental impact of structural change in European coal regions. However, this fund would have to be financed through additional resources and not from the envelope foreseen for the European Structural and Investment Funds. The funding should be closely interlocked with cohesion policy. This additional funding could then be used to strengthen European Regional Development Fund and European Social Fund programmes for these NUTS 2 regions over the next seven years."

The recommendations by the CoR argue that support from the Just Transition Fund should be channelled through programmes of the cohesion funds. They also emphasise the need for the EU to allow national, regional and local governments extra leeway to support businesses affected by the move away from coal. The CoR says that the EU's rules on state aid, which are due to expire in 2020, should be revised to "ensure that coal regions have sufficient flexibility to enable them to phase out coal in a socially and economically viable way".

Mr. Speich said: "Support for new socio-economic perspectives in coal regions has to start now – it is too late to act when the economic situation in coal regions has deteriorated."

The 350 members of the CoR include many representatives from the 41 regions in 12 member states (including the UK) that still have coal mines. The CoR recommended cooperation between these regions – and between them and national and EU levels of government – as they seek to adjust their economies, both to avoid duplication and to share experiences. The CoR's recommendations identify extra vocational training, the creation of technical universities the development of an innovation-friendly environment, and digitisation as critical tools in efforts to diversify their economies

The CoR's opinion also emphasises the development potential of these regions' existing strengths. It argues that structural transformation in these regions should use the current industrial and energy fabric as the basis for development, take into account the innovation and investment cycles of extant industrial players, and build on industrial clusters, operational skills, and research capacity.

A high-level conference organised by the CoR on 9 October – 'Coal Regions in Transition' – included national ministers and regional leaders from 11 coal regions in eight member states, together with Commissioner Oettinger.

The proposal to create a Just Transition Fund is a major element of the programme presented by Ms von der Leyen, who will become president of the European Commission on 1 November. The European Commissioner-elect for Cohesion and Reform, Elisa Ferreira, told the European Parliament on 2 October that she would present a proposal for the Fund within 100 days of taking office. Another of the first tasks of the incoming Commission will be to achieve an agreement with EU member states and the European Parliament on the EU budget for 2021-27.

The phasing out of the coal industry is expected to lead to a large number of job losses in Bulgaria, Czechia, Germany, Poland, Romania, Spain and the UK, with redundancies also in Greece, Slovakia, and Slovenia. A study suggests that the two regions where the social consequences could prove greatest are the Greek region of Dytiki Makedonia and the Romanian region of Sud-Vest Oltenia.

Quotes from the conference (alphabethical order):

Jerzy Buzek, former Chair of EP ITRE committee, said: "The Just Transition Fund to support our coal regions in transition is timely, justified and needed especially in light of new EU 2050 long-term climate strategy. It was important to hear that its creation is one of main priorities for the EC President-elect, Ursula von der Leyen. In addition, Kadri Simson - Commissioner-designate for Energy - in reply to my question during her hearing in the EP, assured me that the Just Transition Fund should not by any means replace other existing funding from the EU. This should be and this will be new, additional money. This highly encouraging statement was strongly reconfirmed by Frans Timmermans - Executive Vice President-designate for the “European Green Deal" - during his hearing in the EP yesterday. I believe, and I have been advocating for it for months now, a separate budget line for this Fund in the MFF is necessary. Our citizens call on us for an immediate action on climate emergency. We need to take this responsibility and be bold in decarbonising our economy. To succeed we need innovative solutions, cooperation between the EU, the member states and the Local and Regional Authorities. Targeted, financial support, especially for the coal and carbon intensive regions is crucial since for them the energy transition is the biggest challenge. We need to make sure that we can reach the climate neutrality by 2050 and nobody is left behind."

Jakub Chełstowski, Marshal of the Voivodeship of Silesia, Poland, said: „I welcome the new proposals from the European Commission and the European Parliament regarding the additional support for regions traditionally associated with coal mining. I am convinced that the new Just Transition Fund is a step in the right direction. However, it is crucial that the management of these funds remains as much as possible at the level of regions, within already proven shared management system. Regional self-government is the best link between residents and decision-makers at national and European level. This is of key importance in the process of socially just and economically effective transformation of Silesia Region."

Klára Dostálová, Minister for Regional Development, Czech Republic, said: "Successful transition of coal regions means a lot to the harmonized regional development within the EU and the Czech Republic itself. We need joint solutions although one-size-fits-all model cannot be always applied as the regions have their own specifics. Without adequate and targeted financial and knowledge support that goes beyond the cohesion allocation, economic, environmental and social impacts might turn too costly. Together with the affected regions the EU and national governments have to put efforts in setting forth sustainable strategic development goals and and finding the best ways of implementing them. I believe we are on the right track."

Reiner Haseloff, Minister President Saxony-Anhalt, Germany, said: “The phasing out of Germany's coal sector is in line with European and global climate policy. It is also in the EU's own interest to support national engagement. It is only logical, then, that the EU be involved in providing appropriate funding instruments and other measures. The coal phase-out means significant changes for the public and businesses in the areas affected, bringing concerns about rising energy costs and possible job losses. It is now the responsibility of all of us to create new prospects. Otherwise there is a risk of depopulation and the loss of purchasing power and value chains."

Francisco Igea, Vice-President of the Junta de Castilla y León, Spain, said: "The Regional Government of Castilla y León is in favour of setting up a specific fund that does not place the burden of decarbonisation and energy transition on the municipalities of the mining areas."

Jerzy Kwieciński, Minister of Finance, Investment and Economic Development, Poland, said: "Poland is already undertaking actions on the transformation of Polish coal regions - śląskie, dolnośląskie and wielkopolskie. However we must recognise that Member States have different starting points and will need to incur different energy transition costs. Energy transition process should take place gradually and in a thoughtful way. Transformation must be tailored to the needs of the region - on one hand it should take into account the social dimension and on the other ensure adequate financial support. Just Transition Fund ought to support soft and hard interventions and should not benefit form cohesion policy budget. Not only should it assist coal regions, but also regions that no longer extract coal and face serious post-coal structural problems."

Marc Lemaitre, Director General DG REGIO, said: “Leaving no region behind: a central aim of cohesion policy towards a climate-neutral Europe."

Younous Omarjee, Chair of EP REGI committee, said: "While coal still powers 25% of electricity generation in the European Union, we need to support coal-producing regions in the transition towards a decarbonised environment - a transition in which they will have to be the key players. They are ready to take up this challenge of cutting back CO2 emissions by half between now and 2030. However, they need to be given support. The EU must set up a substantial transition fund so as to attenuate the social cost as much as possible."

Kirsten Scholl, Director General European Policy, Federal Ministry for Economic Affairs and Energy, Germany, said: “Cutting coal-fired power generation is an important element of climate policy. The exit from coal must become an opportunity for the affected regions. Cohesion policy is a very appropriate instrument for coal regions to support the socio-economic transformation process. Therefore, I very much welcome the current European debate on this topic which must also take into account state aid issues."

Witold Stępień, Member of the Łódzkie Regional Assembly and CoR rapporteur on the Mid-term evaluation of the Programme for the Environment and Climate Action (LIFE) 2014-2020, said: "Our citizens call on us for an immediate action on climate emergency. We need to take this responsibility and be bold in decarbonising our economy.  To succeed we need innovative solutions, cooperation between the EU, the member states and the Local and Regional Authorities. Targeted, financial support,  especially for the coal and carbon intensive regions is crucial since for them the energy transition is the biggest challenge. We need to make sure that we can reach the climate neutrality by 2050 and nobody is left behind."

Mihaela Toader, State Secretary, Ministry of European Funds, Romania, said: "I stand by our Presidency of the Council of the EU moto 'Cohesion, a common European value' and I strongly believe that the Cohesion Policy represents the expression of European solidarity."

Ivo Vondrák Governor of Moravskoslezský Region, Czech Republic, said: "Since 1990s we have been in the transition process from 'old time' coal regions to future-oriented communities. A lot have already been done but we still have a lot to do. We need a strategic framework based on multi-level and multistakeholder governance. In fact, it means continuation of already existing RE:START program in the Czech Republic and coal initiative in the EU. We need dynamic and persistent implementation in the next at least decade by 2030 with a special focus on strategic transformation projects and their synergy. We need Models + Minds + Money: Models (examples and sharing of relevant best practice + Minds (building of regional capacities = talented and motivated people participating in transformation projects) + Money (financial sources – both public/EU, national, regional, local AND private)."


 

Contact:

Carmen Schmidle
Tel. +32 (0)2 282 2366
carmen.schmidle@cor.europa.eu