Special EU fund for coal regions looks good but is costly, warns Czech study

Creating a new European fund to support coal regions – the Just Transition Fund – may look like a positive step for disadvantaged areas, but its administration is complex, costly and threatens its effective use, warns a new Czech study based on interviews with officials.

The Just Transition Fund (JTF) is available to regions with a heavy coal mining industry. The Czech Republic is one of the beneficiaries, as the country has three coal mining areas. In 2019, the Czech and Polish governments pushed for special money for coal regions, saying otherwise they would not comply with the EU’s climate neutrality target. The Czech Republic is now drawing money from the fund, but with difficulties as it may not be used effectively due to strict deadlines and limited national capacity, warns the European policy institute EUROPEUM study. JTF funds must be allocated by the end of 2026.

The analysis warns that for each instrument, such as the JTF, a specific budget is needed to manage the fund. In the case of the JTF, 2.3% of the total fund has been earmarked for administration at the EU level, with additional money paid by member states to cover officials, offices, publicity and monitoring of the fund. According to the analyst, the creation of a new fund may be attractive from a political or marketing perspective, but it always requires a large amount of financial, human and organisational capacity on the part of member states and is not necessarily worthwhile.

Source: Euractiv