The Just Transition Mechanism (JTM) is a key tool to ensure that the transition towards a climate-neutral economy happens in a fair way, leaving no one behind. As part of the European Green Deal, the Just Transition Mechanism provides resources for facing the challenge of the transition process towards the Union’s 2030 climate target and the objective of climate neutrality in the Union by 2050.
The JTM consists of three pillars:
- the first pillar is the Just Transition Fund
- the second pillar is the InvestEU Just Transition scheme
- the third pillar is the Public Sector Loan Facility (PSLF)
In order to unlock and implement JTM resources, EU Member States must prepare Territorial Just Transition Plans (TJTPs), which will be part of their cohesion policy programmes. The TJTPs will include an outline and timeline for the transition process until 2030 and 2050, and identify the eligible territories expected to be most negatively impacted by this transition. They should set out the social, economic, and environmental challenges stemming from the phasing out of fossil fuel-related activities or decarbonisation of greenhouse gas-intensive processes or products.
The Public Sector Loan Facility (PSLF) is a blending instrument combining grants up to EUR 1.525 billion from the EU budget with loans up to EUR 10 billion from the European Investment Bank, and aiming to mobilise around EUR 18.5 billion of public investments. It will support projects addressing the challenges of the transition process in the territories and sectors identified in the Territorial Just Transition Plans.
Successful projects will receive a grant from the European Commission and a loan from the European Investment Bank.