The Just Transition Mechanism urges stronger local partnerships and clearer funding priorities
The EU’s ambition to become the first climate-neutral continent by 2050 is taking shape through the European Green Deal and its financing arm: the Just Transition Mechanism (JTM). In its policy analysis, the Council of European Municipalities and Regions (CEMR) acknowledges the value of this tool while calling for stronger local engagement and better alignment with existing cohesion funds.
The JTM, made up of the Just Transition Fund, a dedicated InvestEU scheme, and a public sector loan facility via the EIB, aims to support the territories most affected by the transition to a green economy, particularly those dependent on carbon-intensive industries.
CEMR welcomes:
- The creation of new financial tools tailored to the social and economic impacts of decarbonisation, especially the Just Transition Fund, with its €7.5 billion proposal.
- Inclusion of the JTF in Cohesion Policy, which ensures the application of the partnership principle and opens space for dialogue with local and regional governments in the design of transition plans.
- The focus on NUTS 3 level, allowing targeted support to local realities and better alignment with community needs.
- Technical assistance and peer exchange platforms can empower municipalities to replicate successful models and accelerate climate-neutral transitions.
However, CEMR expresses concern over:
- Budget uncertainty: With Member States resisting increases to the EU’s overall budget, there’s a risk the JTF will simply reallocate existing cohesion funds, limiting its added value.
- Overlap with existing cohesion goals: Much of the JTF’s focus, green investment, upskilling, and digitalisation, is already covered by current ESIF priorities (PO2 and PO4). Its distinct impact must be clarified.
- Thematic constraints on cohesion funds: Requirements to reallocate ERDF and ESF+ funds to the JTF may reduce resources available for other local development priorities.
For CEMR, local and regional governments must remain central actors in this transition. Their involvement is key not only in planning and implementation but also in ensuring that no territory is left behind as Europe moves toward a greener, fairer future.
For more information, contact:
Advisor – Environment and mobility
