20 May 2020

The time for rapid redevelopment of coal regions is now

Christian Egenhofer / Jorge Núñez Ferrer / Irina Kustova / Julian Popov

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The economic slow-down caused by the pandemic will aggravate the existing stress in some regions, especially those relying on lignite, coal and peat as their main economic activity. But efficient and effective use of Covid-19 recovery funds can give real meaning to the ‘just transition’ concept if they focus on tangible progress to the benefit of the regional, national and EU economy while improving the environment and implementing the European Green Deal.

For coal regions, the European Commission needs a regional place-based approach that builds on the ‘targeted approach’ of the European Green Deal while identifying urgent actions.

Member states must reinforce regional strategies for coal regions in light of the recovery measures and the European Green Deal for the next multiannual financial framework 2021-27, taking account of the transition towards a more sustainable and lower carbon economic structure.

Appropriate EU instruments should be combined in a complementary way to restructure the economies of the regions by developing low-carbon power and other carbon-saving solutions, using the know-how and infrastructures in place.

Solid strategies to address the transition costs that creating an investment-friendly economic environment should be devised to build up self-sustainable activities and avoid subsidy dependency. The opportunities offered by InvestEU should be used as funding leverage to attract large-scale new industry investment.

The short-term economic and social costs should soon be recovered. By contrast, supporting declining activities will most likely lead to significant long-term losses. Many good examples of conversions exist to inform those addressing inter- and intra-generational redistribution issues.

This paper is also available in Bulgarian, Greek and Romanian.