Just transition or just talk

Just Transition or Just Talk? 2020

National Energy and Climate Plans reveal that the EU countries set to receive most of the Just Transition Fund plan to stick with coal – or swap it for fossil gas.

Charles Moore

European Programme Lead

9 September 2020 | 12 min read

About

In this report, produced with Climate Action Network (CAN) Europe, we examine the final National Energy and Climate Plans (NECPs) of 18 EU Member States which still use coal for electricity generation.

We assess whether the plans for coal are in line with the EU’s climate commitments and whether the Just Transition Fund would therefore be used to support a real transition in these EU coal-countries.

We find that 11 out of 18 EU coal-countries do not have a Paris-compatible plan to phase-out coal.

Executive summary

Just transition or just talk?

7 countries plan to stick with coal beyond 2030 – but look set to receive most of the Just Transition Fund.

4 countries plan to phase-out coal by 2030 – but will swap it for fossil gas.

7 countries are on track for a 2030 coal phase-out without a significant increase in fossil gas

As part of its European Green Deal, the European Commission has proposed a Just Transition Fund, worth up to €40billion, to support the EU regions most affected by the transition to a low carbon economy.

This report analyses the final National Energy and Climate Plans (NECPs) of 18 EU Member States that are still using coal for electricity generation. We assess whether the plans for coal are in line with the EU’s climate commitments and whether the Just Transition Fund would therefore be used to support a real transition in these EU coal-countries. This report is the second part of a series and follows CAN Europe and Ember’s 2019 assessment of the draft NECPs: Just Transition or Just Talk?

To meet the EU’s commitments under the Paris Agreement and limit global temperature rise to 1.5°C, all EU countries need to phase out coal by 2030, and transition directly to clean electricity without increasing the use of other fossil fuels such as fossil gas.

The majority of EU coal-countries are not ready for a just transition. They have no plans to give up coal by 2030. Or they will swap it for fossil gas – another dead end if the EU is to meet its Paris Agreement commitments. Now is the time to support coal regions in countries genuinely undergoing a rapid energy transition. But the Just Transition Fund looks set to reward inaction rather than real climate ambition.

Charles Moore European Programme Lead, Ember

As one of the first pieces of legislation of the European Green Deal, the Just Transition Fund must live up to its name by supporting real transition, not talk. If the EU wants to show commitment to the Paris Agreement, no coal power plant should be operational beyond 2030. Transition means change to clean, renewable energy – not fossil gas. Coal regions need future-proof investments in the new economy, not further entrenchment in fossil-fuel dependency.

Elif Gündüzyeli Senior Coal Policy Coordinator, CAN Europe

Key findings of the NECP analysis

11 out of 18 EU coal countries do not have a Paris-compatible plan to phase out coal

No coal transition: 7 countries plan to stick with coal beyond 2030 – but look set to receive most of the Just Transition Fund.

Coal to gas transition: 4 countries plan to phase-out coal by 2030 – but will swap it for fossil gas.

Fossil-free transition: 7 countries are on track for a 2030 coal phase-out without a significant increase in fossil gas

No coal transition


7 countries do not plan to phase-out coal by 2030: Bulgaria, Croatia, Czechia, Germany, Poland, Romania & Slovenia. Total installed coal capacity across all 7 countries falls by just 42% in the next decade. 52GW of coal is expected to be operational after 2030, nearly all (~90%) of which is in Czechia, Germany and Poland.

Coal to gas transition


4 countries plan to phase-out coal by 2030 but with a significant increase in fossil gas: Greece, Hungary, Ireland & Italy.

Fossil-free transition


7 countries are on track to phase-out coal by 2030 – without a significant increase in fossil gas: Denmark, Finland, France, the Netherlands, Portugal, Slovakia & Spain.

Implications for the Just Transition Fund

Who gets what?

Our analysis demonstrates that without reform, the Just Transition Fund risks rewarding climate laggards at the expense of countries with ambitious and Paris compatible plans for their coal regions.

Under the existing methodology:

  • Nearly two-thirds of the Fund will go to the 7 countries which do not plan to phase-out coal by 2030. In the long term, 2 of these countries (Bulgaria & Poland) are also planning a significant expansion of fossil gas use.
  • More than 10% of the Fund will go to the 4 countries which plan to phase-out coal by 2030 but with a significant increase in fossil gas use.

Without national governments setting a clear timeline to go beyond fossil fuels, it is unclear how the Just Transition Fund will effectively support coal regions and communities through the energy transition.

NECPs indicate that over the longer-term (beyond 2030) coal-to-gas is planned to play a significant role in the electricity transition for both Bulgaria and Poland.

Policy Recommendations

Support from the Just Transition Fund must align with Paris-aligned targets

#1 Fossil Free

The European Parliament, Council and Commission must ensure that coal and all other fossil fuels, gas in particular, are fully excluded from the scope of the Just Transition Fund, and that no fossil fuel projects can be included in the Territorial Just Transition Plans. All loans and grants to be mobilised through all three pillars of the Just Transition Mechanism should comply with EU Taxonomy rules and principles. Coal regions need future-proof investments in the new economy – fossil gas is another dead-end.

#2 Conditional on Coal Phase-Out

The European Parliament, Council and Commission should render receiving support from the Just Transition Fund conditional on Member States’ coal phase-out commitments, the setting of closure dates of coal related activities, and the speed of the transition away from fossil fuels. Climate laggards should not get a free pass.

#3 Underpinned by Quality NECPs

The European Commission must hold EU governments to account on the quality of their National Energy and Climate plans, and make recommendations that will ensure that Member States properly update their NECPs for the inevitable phase out of coal in a socially just and orderly manner. The next iteration of the NECPs should reflect concrete plans to leapfrog from coal to renewable energy sources, while applying the energy efficiency first principle, to achieve the Union’s revised 2030 climate targets.

#4 Partnership Principle

The European Commission should set a clear, transparent and effective mechanism ensuring that the Territorial Just Transition Plans will be designed, implemented, and monitored with equal participation of all relevant stakeholders at local and regional levels – based on the partnership principle.

#5 Paris-compatible Energy Transition

All EU Member States should commit to phase out coal by 2030 the latest, and move towards renewables based energy systems underpinned by the energy efficiency first principle. This should be combined with ambitious emission reduction targets to help put the EU back on-track to meet the commitments of the Paris Agreement, while bringing numerous health, economic, environmental benefits, on top of green and decent jobs.

#6 Deliver Real Impact in Coal Regions

In their Territorial Just Transition Plans, coal regions should prioritise projects that have the highest added value in terms of supporting decent, new and green jobs, and avoid those projects which will cause lock-in to other fossil fuels. They should set concrete milestones and timelines for achieving climate neutrality in the next decades.

#7 Integrated Approach

The upcoming programming of all Cohesion Policy Funds must embrace the transition towards climate neutrality in an integrated manner. Member States should design their Territorial Just Transition Plans to ensure complementarity within all the various funding streams available.

Conclusion

Just transition or just talk?

The CECPs of the seven Member States (Bulgaria, Croatia, Czechia, Germany, Poland, Romania, Slovenia) who are in line to receive the lion’s share from the Just Transition Fund do not have plans to phase-out coal in the next decade. The NECPs show that a number of them are also planning a significant and increased role for fossil gas in their electricity transitions. Moreover, of the eleven countries expected to phase-out coal by 2030, our analysis indicates that four (Greece, Hungary, Ireland and Italy) are planning a significant coal-to-gas transition.

The EU must achieve climate neutrality by 2040 in order to do its fair share under the Paris Agreement, to limit the global temperature increase to 1.5C. This means all Member States should phase out coal by 2030, and all fossil fuels by 2040 at the latest.

National Energy and Climate Plans (NECPs) demonstrate that many Member States are not even in line with the European Green Deal’s 2050 climate neutrality objective, and its new emission reduction targets by 2030. Let alone compatible with the EU’s fair share under the Paris Agreement.

The Just Transition Fund can be an important instrument to help mitigate the social, economic and environmental impacts of this rapid energy transition in the regions that are most vulnerable. It is created as a tool to specifically support the European Green Deal’s mid-century climate neutrality objective, and 2030 emission reduction targets, without leaving anyone behind.

According to the International Trade Union Confederation (ITUC), “A Just Transition is an economy-wide process that produces the plans, policies and investments that lead to a future where all jobs are green and decent, emissions are at net zero, poverty is eradicated, and communities are thriving and resilient” [30]. As the first piece of legislation in the European Green Deal, the Just Transition Fund should reflect the objectives of just transition, and set the example for the other legislative processes.

However, without improvements to its design – as recommended in this briefing – the Fund risks rewarding climate laggards at the expense of real climate leaders.

Supporting Material


Downloads


Methodology

Coal Capacity

2020 installed capacity is sourced from the latest (17.07.20) version of the Europe Beyond Coal database – https://beyond-coal.eu/data/.

Installed capacity is the sum of all units marked as “open” under the category “unit status (gross)”, this includes plants which are marked as open in the database but sub-categorised as on standby, under retrofit or deactivated (BG – 0.5GW, CZ – 0.4GW, DE – 5.4GW, DK – 0.9GW, ES – 0.3GW, GR – 0.6GW, IT – 0.6 GW, HR – 0.1 GW, HU – 0.2GW, PL – 0.8GW, RO – 0.7GW).

The figures in the Europe Beyond Coal public database are provided as gross MW, a gross to net conversion factor of 92% is applied for units that commenced operation pre-1980, 94% for all other units.

When the NECP provides projections for both existing policy measures (WEM) and with additional policy measures (WAM), the 2030 figures are preferentially sourced from the WAM projections.

The 2030 coal capacity figures are not available for Czechia in the NECP, however the NECP contains projections for net electricity generation from coal (TWh) in 2030 and 2020. We have used the ratio of 2030 to 2020 electricity generation from coal and applied this to the current (17.07.20) installed coal capacity to forecast installed coal capacity in 2030. (N.b this assumes load factor across the remaining fleet remains constant).


Acknowledgements

Additional contributors

Pete Tunbridge (Ember), Małgorzata Kasprzak (Ember), Euan Graham (Ember), Markus Trilling (CAN Europe), Magdalena Klarenbach (CAN Europe).

Input from national partners

Genady Kondarev (Za Zemiata – Friends of the Earth Bulgaria), Joanna Flisowska (Greenpeace Poland), Nikos Mantzaris (Green Tank), Laura Nazare (Bankwatch Network Romania), Antonio Tricarico (Re:Common), Alexandru Mustata (Bankwatch Network Romania), Constantin Zerger (Deutsche Umwelthilfe), Ricarda Dubbert (Deutsche Umwelthilfe), Edoardo Zanchini (Legambiente), Massimiliano Varriale (WWF Italy), Izabela Zygmunt (Bankwatch Network Poland), Alexa Botar (National Society of Conservationists – Friends of the Earth Hungary).

Images

Front & back cover – via Unsplash: Lars Kuczynski; p4 – Maryna Yazbeck; p6 – Didier Weemaels; p10 – Curioso Photography; p25 – Nicholas Doherty. p21 – alvarez from iStockphoto

Report design

Wilf Lytton


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