Regulation (EU) 2021/1056 of the European Parliament and of the Council of 24 June 2021 establishing the Just Transition Fund

Article 1

Subject matter and scope

This Regulation establishes the Just Transition Fund (JTF) to provide support to the people, economies and environment of territories which face serious socio-economic challenges deriving from the transition process towards the Union’s 2030 targets for energy and climate as defined in point (11) of Article 2 of Regulation (EU) 2018/1999 of the European Parliament and of the Council (¹) and a climate-neutral economy of the Union by 2050.

It lays down the specific objective of the JTF, its geographical coverage and resources, the scope of its support with regard to the Investment for jobs and growth goal referred to in point (a) of Article 5(2) of Regulation (EU) 2021/1060, as well as specific provisions for programming and indicators necessary for monitoring.

Article 2

Specific objective

In accordance with the second subparagraph of Article 5(1) of Regulation (EU) 2021/1060, the JTF shall contribute to the specific objective of enabling regions and people to address the social, employment, economic and environmental impacts of the transition towards the Union’s 2030 targets for energy and climate and a climate-neutral economy of the Union by 2050, based on the Paris Agreement. The JTF may also support investments contributing to the objectives of the Strategic Technologies for Europe Platform (STEP) referred to in Article 2 of Regulation (EU) 2024/795 of the European Parliament and of the Council (²).

Article 3

Geographical coverage and resources under the Investment for jobs and growth goal

Article 4

Resources from the European Union Recovery Instrument

This amount shall be considered other resources as referred to in Article 3(3) of this Regulation. As provided for in Article 3(1) of Regulation (EU) 2020/2094, this amount shall constitute external assigned revenue for the purpose of Article 21(5) of the Financial Regulation.

The amount referred to in paragraph 1 of this Article shall be made available for budgetary commitment under the Investment for jobs and growth goal for the years 2021 to 2023, in addition to the resources referred to in Article 3, as follows:

— 2021: EUR 2 000 000 000 ,

— 2022: EUR 4 000 000 000 ,

— 2023: EUR 4 000 000 000 .

An amount of EUR 15 600 000 in 2018 prices shall be made available for administrative expenditure from the resources referred to in the first subparagraph.

Article 5

Green Rewarding Mechanism

The allocation of additional resources for each Member State shall be determined in accordance with the following:

(a) for Member States that achieved a reduction in greenhouse gas emissions, the reduction in greenhouse gas emissions achieved by each Member State shall be calculated by expressing the level of greenhouse gas emissions of the latest reference year as a percentage of the greenhouse gas emissions observed in 2018; for Member States that have not achieved a reduction in greenhouse gas emissions, that percentage shall be set at 100 %;

(b) the final share for each Member State shall be obtained by dividing national shares set out in Annex I by the percentages resulting from point (a); and

(c) the result from the calculation under point (b) shall be rescaled in order to sum up to 100 %.

Article 6

Specific allocations for outermost regions and islands

When preparing their territorial just transition plans in accordance with Article 11(1), Member States shall take particular account of the situation of islands and outermost regions facing serious socio-economic challenges deriving from the transition process towards the Union’s 2030 targets for energy and climate and a climate-neutral economy of the Union by 2050, having regard to their specific needs as recognised in Articles 174 and 349 TFEU.

When including such territories in their territorial just transition plans, Member States shall set out the specific amount allocated for those territories with the corresponding justification, taking into account the specific challenges of those territories.

Article 7

Conditional access to resources

By way of derogation from Article 10(1) of this Regulation, the remaining 50 % of the annual allocations shall not be included in the priorities. In such cases, the programmes supported from the JTF and submitted in accordance with Article 21 of Regulation (EU) 2021/1060 shall include only 50 % of the annual JTF allocations in the table referred to in point (g)(ii) of Article 22(3) of that Regulation. The table referred to in point (g)(i) of Article 22(3) of that Regulation shall identify separately the allocations available for programming and those allocations that shall not be programmed.

By way of derogation from Article 105 of Regulation (EU) 2021/1060, in the absence of the Member State’s commitment to implement the objective of achieving a climate-neutral Union by 2050 by 31 December of any given year starting from 2022, budgetary commitments for the preceding year which relate to non-programmed allocations shall be decommitted in their entirety in the following year.

Article 8

Scope of support

In accordance with paragraph 1, the JTF shall exclusively support the following activities:

(a) productive investments in SMEs, including microenterprises and start-ups, leading to economic diversification, modernisation and reconversion;

(b) investments in the creation of new firms, including through business incubators and consulting services, leading to job creation;

(c) investments in research and innovation activities, including by universities and public research organisations, and fostering the transfer of advanced technologies;

(d) investments in the deployment of technology as well as in systems and infrastructures for affordable clean energy, including energy storage technologies, and in greenhouse gas emission reduction;

(e) investments in renewable energy in accordance with Directive (EU) 2018/2001 of the European Parliament and of the Council (⁴), including the sustainability criteria set out therein, and in energy efficiency, including for the purposes of reducing energy poverty;

(f) investments in smart and sustainable local mobility, including the decarbonisation of the local transport sector and its infrastructure, as well as the deployment of recharging infrastructure;

(g) rehabilitation and upgrade of district heating networks with a view to improving energy efficiency of district heating systems and investments in heat production provided that the heat production installations are supplied exclusively by renewable energy sources;

(h) investments in digitalisation, digital innovation and digital connectivity;

(i) investments in regeneration and decontamination of brownfield sites, water, land restoration and including, where necessary, green infrastructure and repurposing projects, taking into account the polluter pays principle;

(j) investments in enhancing the circular economy, including through waste prevention, reduction, resource efficiency, reuse, repair and recycling;

(k) upskilling and reskilling of workers and jobseekers;

(l) job-search assistance to jobseekers;

(m) active inclusion of jobseekers;

(n) technical assistance;

(o) other activities in the areas of education and social inclusion including, where duly justified, investments in infrastructure for the purposes of training centres, child- and elderly-care facilities as indicated in territorial just transition plans in accordance with Article 11;

(p) promoting access to affordable and sustainable housing;

(q) supporting energy storage systems when contributing to the decarbonisation of regional economies and the integration of renewable energy into the grid.

The JTF may also support investments to achieve the reduction of greenhouse gas emissions from activities listed in Annex I to Directive 2003/87/EC provided that such investments have been approved as part of the territorial just transition plan based on the information required under point (i) of Article 11(2) of this Regulation. Such investments shall only be eligible where they are necessary for the implementation of the territorial just transition plan.

The JTF may also support productive investments in enterprises other than SMEs, while preserving a focus on SMEs. Such investments shall be eligible only where they are necessary for the implementation of the territorial just transition plan, where their support is necessary for job creation in the identified territory and where they do not lead to relocation as defined in Article 2, point (27), of Regulation (EU) 2021/1060. The provision of such support shall not require a revision of the territorial just transition plan where that revision would be exclusively linked to the gap analysis. For investments contributing to the STEP objectives referred to in Article 2 of Regulation (EU) 2024/795, apprenticeships and jobs, education or training for new skills shall be considered in the selection process.

For operations attributed a Seal of Excellence as defined in Article 2, point (45), of Regulation (EU) 2021/1060 and for projects directly participating in an important project of common European interest which the Commission has found to be compatible with the internal market pursuant to Article 107(3), point (b) TFEU having taken into account the Commission communication of 25 November 2021 entitled ‘Criteria for the analysis of the compatibility with the internal market of State aid to promote the execution of important projects of common European interest’, the managing authority may decide to grant support from the JTF directly, provided that such operations contribute to the specific objective set out in Article 2 of this Regulation and contribute to the implementation of the territorial just transition plans.

Article 9

Exclusion from the scope of support

The JTF shall not support:

(a) the decommissioning or the construction of nuclear power stations;

(b) the manufacturing, processing and marketing of tobacco and tobacco products;

(c) an undertaking in difficulty, as defined in point (18) of Article 2 of Commission Regulation (EU) No 651/2014 (⁵), unless authorised under temporary State aid rules established to address exceptional circumstances or under de minimis aid to support investments reducing energy costs in the context of the energy transition process;

(d) investment related to the production, processing, transport, distribution, storage or combustion of fossil fuels.

Article 10

Programming of the JTF resources

The Commission shall only approve a programme, or any amendment thereto, where the identification of the territories most negatively affected by the transition process, contained within the relevant territorial just transition plan, is duly justified and the relevant territorial just transition plan is consistent with the integrated national energy and climate plan of the Member State concerned.

In accordance with Article 112 of Regulation (EU) 2021/1060, the co-financing rate, applicable to the region where the territory or territories identified in the territorial just transition plans in accordance with Article 11 of this Regulation are located, for the JTF priority or priorities shall not be higher than:

(a) 85 % for less developed regions;

(b) 70 % for transition regions;

(c) 50 % for more developed regions.

In accordance with Article 90(5) of Regulation (EU) 2021/1060, the amount paid as exceptional pre-financing shall be cleared from the Commission accounts no later than with the final accounting year.

In accordance with Article 90(6) of Regulation (EU) 2021/1060, any interest generated by the exceptional pre-financing shall be used for the programme concerned in the same way as the JTF and shall be included in the accounts for the final accounting year.

In accordance with Article 97(1) of Regulation (EU) 2021/1060, the exceptional pre-financing shall not be suspended.

In accordance with Article 105(1) of Regulation (EU) 2021/1060, the pre-financing to be taken into account for the purposes of calculating amounts to be de-committed shall include the exceptional pre-financing paid.

By way of derogation from Article 112 of Regulation (EU) 2021/1060, the maximum co-financing rates for dedicated priorities established to support the STEP objectives shall be 100 %.

Such a programme may benefit from the additional one-off pre-financing referred to in Article 7a(1), first subparagraph, of Regulation (EU) 2021/1058, where applicable.

Where such a programme benefits from an extended deadline for the eligibility of expenditure as well as for decommitment in accordance with Article 7a of Regulation (EU) 2021/1058, such extension shall also apply to the JTF resources.

Where at least 10 % of the financial resources of the programme is reallocated to one or more dedicated priorities referred to in the first subparagraph, the Commission shall, in 2026, pay 1,5  % of the total support from the JTF to the programme as exceptional one-off pre-financing. In addition, reallocations to dedicated priorities established to support investments contributing to STEP objectives approved in programme amendments prior to the mid-term review shall also count towards the 10 % threshold. Resources from the European Union Recovery Instrument referred to in Article 4 shall not be taken into account for the purpose of calculating the amount corresponding to the 10 % of the financial resources of the programme resources.

The pre-financing due to the Member State which results from programme amendments pursuant to the reallocation to priorities referred to in the first subparagraph of this paragraph shall be counted as payments made in 2025 for the purpose of calculating the amounts to be decommitted pursuant to Article 105 of Regulation (EU) 2021/1060, provided that the request for the programme amendment is submitted to the Commission by 31 December 2025.

By way of derogation from Article 63(2) and Article 105(2) of Regulation (EU) 2021/1060, the final date for the eligibility of expenditure and the decommitment shall be 31 December 2030. That derogation shall apply only where programme amendments reallocating at least 10 % of the financial resources of the programme to one or more dedicated priorities as set out in the second subparagraph of this paragraph have been approved.

For such programmes, where Regulation (EU) 2021/1060 establishes the final date for the purposes of the application of the performance framework, financial management, reporting and evaluation requirements, this shall be read as referring to the same date in the following year. In addition, by way of derogation from Article 2, point (29), of Regulation (EU) 2021/1060, for such programmes the final accounting year shall be deemed to refer to the period from 1 July 2030 to 30 June 2031.

In addition to the assessment for each programme on the outcome of the mid-term review to be submitted pursuant to Article 18(2) of Regulation (EU) 2021/1060, Member States may resubmit to the Commission a complementary assessment as well as related requests for programme amendments, taking into account supported activities introduced by Regulation (EU) 2025/1914 by 31 December 2025. The deadlines set in Article 24 of Regulation (EU) 2021/1060 shall apply.

Article 11

Territorial just transition plans

A territorial just transition plan shall contain the following elements:

(a) a description of the transition process at national level towards a climate-neutral economy, including a timeline of the key transition steps towards the Union’s 2030 targets for energy and climate and a climate-neutral economy of the Union by 2050 which are consistent with the latest version of the integrated national energy and climate plan;

(b) a justification for identifying the territories as most negatively affected by the transition process referred to in point (a) of this paragraph and to be supported by the JTF, in accordance with paragraph 1;

(c) an assessment of the transition challenges faced by the identified most negatively affected territories, including the social, economic, and environmental impact of the transition to a climate-neutral economy of the Union by 2050, identifying the potential number of affected jobs and job losses, the depopulation risks, and the development needs and objectives, to be reached by 2030 and linked to the transformation or closure of greenhouse gas-intensive activities in those territories;

(d) a description of the expected contribution of the JTF support to addressing the social, demographic, economic, health and environmental impacts of the transition to a climate-neutral economy of the Union by 2050, including the expected contribution in terms of job creation and preservation;

(e) an assessment of its consistency with other relevant national, regional or territorial strategies and plans;

(f) a description of the governance mechanisms consisting of the partnership arrangements, the monitoring and evaluation measures planned and the responsible bodies;

(g) a description of the type of operations envisaged and their expected contribution to alleviating the impact of the transition;

(h) where support is to be provided to productive investments in enterprises other than SMEs, an indicative list of operations and enterprises to be supported and a justification of the necessity of such support, including through, where necessary for the purposes of a State aid assessment, a gap analysis demonstrating that the expected job losses would exceed the expected number of jobs created in the absence of the investment;

(i) where support is to be provided to investments to achieve the reduction of greenhouse gas emissions from activities listed in Annex I to Directive 2003/87/EC, a list of operations to be supported and a justification that they contribute to a transition to a climate-neutral economy and lead to a reduction in greenhouse gas emissions going below the relevant benchmarks established for free allocation under Directive 2003/87/EC and provided that those operations are necessary for the protection of a significant number of jobs;

(j) synergies and complementarities with other relevant Union programmes to address identified development needs; and

(k) synergies and complementarities with planned support from the other pillars of the Just Transition Mechanism.

Where the update of an integrated national energy and climate plan pursuant to Article 14 of Regulation (EU) 2018/1999 necessitates a revision of a territorial just transition plan, that revision shall be carried out as part of the mid-term review in accordance with Article 18 of Regulation (EU) 2021/1060.

Article 12

Indicators

Article 13

Financial corrections

Based on the examination of the final performance report of the programme, the Commission may make financial corrections in accordance with Article 104 of Regulation (EU) 2021/1060 where less than 65 % of the target set out for one or more output indicators is achieved.