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18th Aug 2022

Coal regions plan to subsidise polluters with green fund

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Earlier this summer, the European Council adopted the €17.5bn Just Transition Fund (JTF). The fund was set up to help regions disproportionally reliant on fossil fuels transition to a more sustainable and equitable future. A total of 53 regional plans are to be drawn up, with all 27 member states contributing.

But according to an analysis by green pressure group WWF published on Friday (3 September), out of the 14 plans - by eight member states - submitted so far, none are fit for purpose.

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In a letter signed by WWF director Ester Asin, "nine out of 14 plans reviewed show no indication of a reduction in fossil gas use by 2030".

The Czech plans sketch out a transition to a circular economy. But no phase-out of coal and gas is planned or implied. The same goes for Poland, which is set to receive a big chunk of the fund.

According to information provided by the EU Commission, the fund's goal is to support small and medium-sized businesses and help create innovative new ones rather than sustaining existing large fossil-fuelled enterprises.

But most plans excessively support large existing energy companies. The WWF report mentions six cases where large polluters receive subsidies to green their operations. But it is not clear why these large polluters cannot pay for this themselves.

Some plans indicate new investment in fossil fuel infrastructure. For example, in the Polish region Lodskie, new gas projects are implied. Poland's Upper Silesian coal region also proposes using the sustainable fund for aviation projects and prolonging fossil fuel infrastructure.

Subsidies for fossil fuels were axed from the fund in December 2020. But a loophole for gas projects remains in the regional development fund, which is part of the JTF, and a one-percent allowance for gas projects is allowed under strict circumstances.

It is unclear what this will mean for the 14 proposals already submitted. EUobserver asked the European Commission for a response, but has yet to receive one.

The commission has said in the past that it views gas as a transition fuel, which can help coal-reliant countries like Poland phase out coal. However, the International Energy Agency (IEA) has reported that new investment in gas projects are not commensurate with the 2030 climate goals.

In March this year, the commission tentatively denied support for the Bogatynia subregion in Poland. A new gas project was planned, but the reason for the regional plan's dismissal was a planned prolongation of lignite extraction beyond 2030, which is inconsistent with the EU's 2030 targets.

The EU Court of Justice ordered the mine to be closed in May. However, the Polish prime minister Mateusz Morawiecki has said Poland will not comply with the ruling and will continue mining in the area - exposing the deep rift between EU-policy-makers planning the green deadline and coal-reliant nations.

Katie Treadwell, energy policy officer at WWF said that the commission has a duty to ensure that regions do not "squander this unique opportunity to transition to a sustainable future".

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