European Parliament

2019-2024

Committee on Budgetary Control

5.12.2022

WORKING DOCUMENT
on ECA Special Report 22/2022: EU support to coal regions - Limited focus on
socio-economic and energy transition

Committee on Budgetary Control

Rapporteur: Marian-Jean Marinescu

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 Introduction
To fight the climate crisis, the European Union has committed to reducing its greenhouse gas
emissions to net zero by 2050. A fundamental step on that road is phasing out coal – a highly
polluting energy source. The EU’s Green Deal identified the phasing-out of coal energy
production as an essential factor in achieving the 2030 climate change targets and becoming
climate-neutral by 2050. Due to the dropping costs of wind and solar power, the inefficiency
of the mining process, and EU and national climate policy, this process is already well under
way. As of March 2021, half of Europe’s coal plants had already shut down or have a closure
date.
However, closing a coalmine or a plant has consequences. On the people employed there, their
families, the wider community and the economy of the region. It is essential that a coal phase-
out is meticulously planned, consulted upon, with all its impacts thought through and high-
income economic alternatives found, so the process is socially fair as well as good for the people
and the climate. This is known as a ‘just transition’.
In order to deliver on its promise to ‘not leave anyone behind’, the European Commission has
set up the Just Transition Mechanism1 with the objective to support those regions which will be
most affected by the structural impacts of a comprehensive and ambitious decarbonisation
strategy.
A ‘just transition’ away from coal inevitably requires a lot of up-front investment to create new
economic opportunities and in re-training for former coal workers. Since 2018, the Commission
has offered various types of expertise to the coal regions, and, in 2020, it made proposals to set
up the €19.3 billion Just Transition Fund (JTF).

Context
The Just Transition Mechanism aims to ensure that those who depend on carbon-based jobs for
their livelihoods are not abandoned. Just transition is a macro goal of the European Green Deal.
Regulation (EU) 2021/10562 establishes the Just Transition Fund, which in its preamble
recognises that not all regions and Member States ‘start their transition from the same point or
have the same capacity to respond’. That same preamble outlines the aims of the JTF as the
mitigation of the adverse effects of the climate transition by supporting the most affected
territories and workers concerned and promoting a balanced socio-economic transition.
Moreover, the regulation specifies that the JTF seeks to enable regions and people to address
the social, employment, economic and environmental impacts of the transition towards the
Union’s 2030 targets for energy and climate and the Union’s climate-neutral economy by 2050,
based on the Paris Agreement3.
While the Just Transition Fund shall support the Investment for jobs and growth goal in all
Member States4, it aims to support the most affected territories and workers concerned by the
transition, and the its resources shall be programmed for the categories of regions where the
territories concerned are located, on the basis of territorial just transition plans.

1https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal/finance-and-green-deal/just-

transition-mechanism_en
2 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32021R1056
3 International accord signed in 2015 to limit global warming to less than 2°C, with every effort to limit it to 1.5°C.

https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement
4 Article 3 of Regulation (EU) 2021/1056

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At the heart of the process of allocating JTF investments are the Territorial Just Transition Plans
(TJTPs). Member States are required ‘to prepare together with the relevant local and regional
authorities of the territories concerned, one or more TJTPs covering one or more affected
territories...’ The territories must be those most negatively affected based on economic and
social impacts resulting from the transition, especially regarding job losses in fossil fuel
production and use and the transformation needs of the production processes of industrial
facilities with the highest greenhouse gas intensity.
TJTPs are thus a precondition for Member States to access the Just Transition Fund (JTF). The
documents must outline the expected transition process; the most affected territories and all
types of impacts; what operations are envisaged; and how the process will ensure participation,
monitoring and evaluation. TJTPs are developed at the sub-regional level (NUTS-3); therefore,
countries must produce documents for each territory where they plan to use the Just Transition
Fund.
According to Article 11 (3) of the regulation establishing the Just Transition Fund, the
preparation and implementation of the TJTP must involve the relevant partners in accordance
with Article 8 of Regulation (EU) 2021/10605. This prescribes that such a partnership must
include at least the following partners:
 regional, local, urban and other public authorities;
 economic and social partners;
 relevant bodies representing civil society, such as environmental partners, non-
governmental organisations, and bodies responsible for promoting social inclusion,
fundamental rights, rights of persons with disabilities, gender equality and non-
discrimination;
 research organisations and universities, where appropriate.
Hence, the preparation of TJTPs should be done in close cooperation with those entrusted with
local and regional decision-making authorities, as well as actors representing civil society who
can provide invaluable insights into the complex social, economic, and cultural aspects of just
transition impacts. As of August 2022, ten (10) Territorial Just Transition Plans had been
approved6.
Member States can request support from the Technical Support Instrument7, to help in the
implementation and even development of the respective TJTPs.

Audit scope and approach

With the overall goal of contributing to the cost-effective implementation of the JTF, the ECA’s

5 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32021R1060&from=EN
6 Russia’s invasion of Ukraine in 2022, and its effects on the energy market, may also result in delays in the
transition away from coal, and have an impact on the implementation of the transition plans.
7The Technical Support Instrument (TSI) is the EU programme that provides tailor-made technical expertise to

EU Member States to design and implement reforms. The support is demand driven and does not require co-
financing from Member States. Support may be provided directly through the Commission’s in-house expertise or
with other providers of technical support: experts from EU Member States' national administrations (TAIEX),
international organisations, private firms and consultancies, individual experts from the private sector:
https://ec.europa.eu/info/funding-tenders/find-funding/eu-funding-programmes/technical-support-
instrument/technical-support-instrument-tsi_en

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 audit provides an insight into the role of, amongst other instruments, the EU funds, namely, the
European Regional Development Fund (ERDF), the European Social Fund (ESF) and the
Cohesion Fund (CF) in the socio-economic and energy transition in regions where the coal
industry has been in decline. For that, the audit included a sample of seven (7) regions (in five
Member States) and covered over €12.5 billion of EU funds granted under the 2014-2020 MFF
by the second half of 2021:

 LAUSITZ in Brandenburg - Germany

 MORAVIA - SILISIA - Czechia
 MALOPOLSKA - Poland
 SILESIA - Poland
 ASTURIAS - PALENCIA & LEON - Spain
 JIU VALLEY - Romania

The selection was based on the number of coal mines closed between 2010 and 2018, and the
number of coal-mining employees in 2014.

Evidence was obtained from:

a) documentary reviews and interviews with representatives of five Commission DGs

(Competition; Energy; Employment, Social Affairs and Inclusion; Regional and Urban
Policy; and the Joint Research Centre), and with the secretariat of the Initiative for Coal
Regions Transition;
b) a review of data on EU coal production, its use and associated greenhouse gas emissions;
energy efficiency and renewable energy sources; regional population and the economic and
the economic situation (mainly from Eurostat);
c) a review of various studies assessing the energy transition, methane emissions and the
general economic development situation in our sample of seven coal regions;
d) interviews with representatives of seven selected coal regions in transition in five Member
States, as well as desks reviews of strategies and documents on the use of EU funds during
the 2014-2020 period. The selection of the regions was based on the number of coal mines
closed between 2010 and 2018, and the number of coal-mining employees in 2014.

The Court’s observations

ECA assessed whether EU support in 2014-2020 had contributed effectively to the socio-
economic and energy transition in seven selected EU regions where the coal industry has been
in decline. The general conclusion was that EU support to coal regions had a limited focus and
impact on job creation and energy transition and that, despite overall progress, coal remains a
significant source of greenhouse gas emissions in some Member States.
More specifically, the Court observed that:
A. Labour market demand augmented employment prospects, but data is insufficient to
assess how coal workers benefited from EU-funded training: training courses supported

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 by the ESF8 were available to coal workers who had been laid off, but data on participation
for this specific group was lacking. Moreover, the number of jobs crated directly in those
regions through investment under the ERDF9 was relatively low. Nevertheless, the Court
observed that the situation in the labour market in most regions object of the audit reduced
the risk of laid-off workers remaining unemployed.
B. Member States used EU funds for territorial cohesion without focusing on the
transition of coal regions: the selected coal regions used EU funds in different ways with
a view to addressing their own specific needs but with weak focus on socio-economic and
energy transition. It was observed that in most regions in the sample, funded projects did
not have a significant impact on energy savings or on the renewable energy production
capacity. In a previous opinion on the JTF regulation, the Court had already stressed that
the Commission had not carried out a comprehensive analysis of what the previous EU
funding achieved in these regions, or of their remaining needs. Moreover, the Court added,
they found challenges for Member States in using the funding available within the set
timeframe to support an effective transition. The Court concluded that these weaknesses
increase the risk of funds intended to alleviate the socio-economic and environmental costs
of the transition being spent without the transition effectively taking place.10
C. Despite overall progress, coal remains a significant source of greenhouse gas emissions
in some Member States: CO2 emissions from coal combustion decreased (by 59% between
1990 and 2020 in E-27), but domestic coal has sometimes been replaced by imports or by
other fossil fuels. In six countries (PL, CZ, BG, DE, SL, and RO), coal combustion for
electricity and heat generation was responsible for between 9% and 32% of their total
greenhouse emissions in 2020.11 The proportion of electricity and heat produced from coal
across the EU decreased by 11 percentage points between 2013 and 2020, from 25 % to 14
%. While the proportion of electricity and heat generated from renewable energy sources
increased by 11 percentage points in the same period, the proportion generated from fossil
gas also grew by 4 percentage points. The Court observed, as well, that Member States have
so far paid little attention to methane emissions from closed or abandoned coalmines.
Moreover, the reporting and mitigation of these emissions is currently not well regulated,
but the Commission has published in December 2021 a proposal12 that aims to tackle these
issues.

The court’s recommendations

The Court recommends the Commission to:
1. Check that the Just Transition Fund is used effectively and efficiently to alleviate the
socio-economic impact of the transition to climate-neutrality in coal and carbon-
intensive regions.
Concretely, the Commission when approving Territorial Just Transition Plans and

8 The main EU instrument to support people’s employment opportunities and skills.

9 The role of the ERDF is to create jobs.
10 The risk has increased with the Russia’s 2022 invasion of Ukraine.
11 Excluding emissions and sinks from land use, land-use change and forestry, as well as emissions from

international aviation (EEA, Annual European Union greenhouse gas inventory 1990–2020 and inventory report
2022, 2022, pp. 80 and 102.)
12 Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on methane

emissions reduction in the energy sector and amending Regulation (EU) 2019/942 (COM/2021/805 final)

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 Programmes and their amendments, and when monitoring and reporting on their
implementation, should check that Member States have:
a) specified the planned measures and timeframe for transitioning away from coal and
transforming carbon-intensive activities in line with the EU’s climate objectives;
b) ensured that programmed resources do not exceed the financial needs identified in
line with the pace of the transition; and
c) ensured complementarity and coordination between the various EU and national
sources of funding.
Target implementation date: 2022 for the adoption of Territorial Just Transition Plans
and Programmes; 2026 for monitoring and reporting

2. Share good practice for measuring and managing methane emissions.

More concretely, building on the 2021 proposal for a Regulation on methane emissions
reduction in the energy sector, the Commission should gather and share examples of good
practice in Member States of measuring and managing methane emissions from closed or
abandoned coalmines.
Target implementation date: 2025

The Commission’s reply to the Court’s recommendations

The Commission accepts recommendations 1 and 2. As regards recommendation 2, the
Commission informed that the content of the future Regulation depends on the outcome of the
legislative procedure and is the result of a decision made by the EU Legislator with respect to
the proposal made by the Commission.

The Rapporteur’s point of view and recommendations

Studies show that while many jobs are at risk in the regions undergoing the shift towards a
climate neutral economy, using the JTF and other financial resources to make smart investment
in people and sustainable sectors could more than replace the jobs lost, help the environment,
and boost local economies.
The Rapporteur:
 acknowledges that a successful « just transition » is a complex procedure; believes,
however that, if done right, it can have a net benefit on coal regions in terms of
employment13, the economy and the environment;
 considers that if not carefully managed through Just Transition policies and processes,
economic changes could result in increased social inequality, worker disillusionment,
strikes or civil unrest and reduced productivity, as well as less competitive business, sectors
and markets;
 recalls that impacts go beyond employment numbers, as the redundancies of coal employees

13A study by the WWF, states that in Silesia, Poland, as many as 85,000 jobs in different economic branches could
be created by 2030 (Boosting employment, environment, economy through ‘just transition’)

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 will also affect sub-suppliers, as well as the tax revenues in the respective regions, the social
security and health insurance systems;
 stresses that it is important to consider which jobs would be suitable for former hard coal
miners, given their skill sets and salary expectations;
 calls on the Commission to ensure that plans set out a detailed framework of support for all
categories of workers affected directly and indirectly by the transition to a green economy;
 calls for a strong and planned cooperation amongst the EU, nation and local governments,
as that will be key to ensure the success of the process;
 insists on the importance of consultation between the various parties to ensure that the
inevitable challenges are anticipated and well-managed, without discrimination - for
example, to determine which workers will be relocated to a new town or made redundant,
and under what conditions;
 calls, therefore, on the Commission to, when approving Territorial Just Transition Plans,
verify that the “Partnership Principle” has been respected;
 underlines that investments should accelerate the transition to a sustainable and diversified
local economy, support future-proof and quality jobs provide social support for coal
communities and municipalities;
 is of the opinion that Member States and regions need guidance and accompanying to
achieve a just transition and welcomes in this aspect the establishing by the Commission of
the Just Transition Platform;
 considers that it would be important to share and publicise draft and final plans both for the
sake of transparency and enhanced trust and to facilitate learning between the regions,
provide valuable information to investors as well as improve the potential for engagement
of all partners in the development of plans;
 emphasises the importance of making use of all available national and EU funds to
implement the TJTPs, and calls on the Commission to ensure consistency between these
plans and other EU funds, e.g. the Recovery and Resilience Facility.

European Parliament’s earlier work related to the subject provided by the European
Parliament Research Service (EPRS)
In its September 2020 resolution, the European Parliament called for an increased budget of at
least EUR 25 billion for the Just Transition Fund under the Multiannual Financial Framework.
A political agreement was reached in December 2020. It includes the amounts as set out in the
Council mandate. In line with the Parliament’s position, the agreed text makes transfers from
the European Regional Development Fund (ERDF) and the European Social Fund+ (ESF+)
voluntary rather than mandatory, includes a green rewarding mechanism (allowing a higher JTF
allocation share for those Member States that reduce their greenhouse gas emissions more
quickly) and makes access to half of the JTF allocation conditional on committing to the EU
objective of achieving climate neutrality by 2050.

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 1. Selected European Parliament resolutions

European Parliament resolution of 10 June 2021 on the views of Parliament on the ongoing
assessment by the Commission and the Council of the national recovery and resilience plans
(2021/2738(RSP)) - paragraph 25

European Parliament resolution of 17 December 2020 on a strong social Europe for Just
Transitions (2020/2084(INI)) - paragraph 11

European Parliament resolution of 13 November 2020 on the Sustainable Europe Investment

Plan - How to finance the Green Deal (2020/2058(INI)) - paragraphs 27-31

European Parliament legislative resolution of 19 May 2021 on the proposal for a Council
decision amending Decision 2008/376/EC on the adoption of the Research Programme of the
Research Fund for Coal and Steel and on the multiannual technical guidelines for this
programme (COM(2020)0320 – C9-0214/2020 – 2020/0141(NLE))

European Parliament resolution of 21 October 2021 on an EU strategy to reduce methane

emissions (2021/2006(INI)) - Paragraphs 25, 28, 29

2. Selected parliamentary questions

Possible replacement of national budgetary support with money from the Just Transition
Fund, Priority question for written answer to the Commission P-002121/2021, rule 138,
Cornelia Ernst (The Left), Martina Michels (The Left)
Commission answer

Just transition fund for mining regions in Europe

Question for written answer E-004237/2019/rev.1 to the Commission, rule 138
Ibán García Del Blanco (S&D)
Commission answer

National 2030 energy and climate plans in the context of the European Green Deal
Priority question for written answer P-004463/2019 to the Council, rule 138
Łukasz Kohut (S&D)
Commission answer

Proposal for a regulation establishing the Just Transition Fund

Question for written answer E-000574/2020 to the Commission, rule 138
José Manuel Fernandes (PPE), Paulo Rangel (PPE), Lídia Pereira (PPE), Álvaro Amaro
(PPE), Cláudia Monteiro de Aguiar (PPE)
Commission answer

Setting up and correctly targeting assistance from the Just Transition Fund for workers at
power plants and mines in the Konin-Turek area of Poland
Question for written answer E-004409/2021to the Commission, rule 138
Leszek Miller (S&D)
Commission answer

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Just Transition Fund – protecting workers in the mining and steel industries
Question for written answer E-000054/2020 to the Commission, rule 138
Beata Szydło (ECR)
Commission answer

Funding from the Just Transition Fund for the Konin lignite mining region
Question for written answer E-002517/2022 to the Commission, rule 138
Anna Zalewska (ECR)
Commission answer

Annex D, Country Report Italy 2020 – Key actions of the Just Transition Fund 2021-2027 –
amendment
Priority question for written answer P-001211/2020 to the Commission, rule 138
Andrea Caroppo (ID)
Commission answer

New mining concessions influencing the allocation of funding under the Just Transition Fund
Question for written answer E-003368/2021 to the Commission, rule 138
Łukasz Kohut (S&D)
Commission answer

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