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EU: Czechia to receive 1.64 bln euros for a just climate transition

Czechia will receive 1.64 billion euros 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, following the European Commission’s adoption of the Just Transition Fund (JTF) Programme.

In particular, the JTF Programme will help 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 EU Programme, therefore, aims to provide a just climate transition by financially aiding the areas which may be adversely affected by the green policies going forward.

“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”, said Frans Timmermans, Executive Vice-President for the European Green Deal.

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. Overall, the JTM provides targeted support to help mobilise around 55 billion euros over the period 2021-2027 in the most affected regions to alleviate the socio-economic impact of the transition.

“I welcome the approval of this ambitious plan for a new green future of Czechia,” added Commissioner for Cohesion and Reforms, Elisa Ferreira. “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 euros 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.”

What does the new funding mean for Czechia?

In Karlovarsky, over 1,000 jobs are related to pollutant power generation activities. It is the least developed region in Czechia but has the potential for the development of small and medium businesses. To ensure the industrial transition in this region is benefitting everyone, the JTF will support entrepreneurs and human resources by helping to re- and up-skill workers.

In Ustecky, 80 per cent of Czechia’s lignite (or brown coal) is extracted. There are over 5,000 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 5,000 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. Therefore, the JTF will invest in decontamination and support the region’s coal phase-out. Investments are planned in the area of energy storage and energy research.

Separately, earlier this month, the Czech EU Presidency organised a series of meetings in Czechia and abroad to promote climate protection, the environment and biodiversity around the world, as part of the leadership’s #Czechia4Climate campaign.

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