Just Transition

Context of the action

In March 2021, United Nations Secretary General António Guterres called for “a global effort to finally organise a Just Transition, going coal plant by coal plant if necessary”.¹ He called on “all countries to embrace the International Labour Organization’s guidelines for a Just Transition and adopt them as a minimum standard to ensure progress on decent work for all”.

The Glasgow Climate Pact adopted at the United Nations climate change talks (COP26) requests the adoption of policies that enable parties to the pact to accelerate their transition towards low-emission energy systems. Commenting on the conclusions of COP26, the Vice-President of the European Commission Frans Timmermans said: “We are going to work bloody hard to get rid of coal, and I believe this conclusion will help us work in that direction. The European community will be strongly committed to that, not just within the EU, but also with our partners worldwide.”

A Just Transition is a key pillar of the European Green Deal, and the EU has created a Just Transition Mechanism to provide targeted support to EU regions that will be affected most by the retreat from using coal, peat and shale oil to generate power. The mechanism aims to mobilise at least €65 billion to €75 billion between 2021 and 2027 to alleviate the socio-economic impact of the transition. This will include dedicated technical assistance.

Furthermore, the European Commission has launched the Initiative for Coal Regions in Transition, as a non-legislative element of the Clean Energy for all Europeans Package. The package comprises eight new laws that need to be converted into national law by each EU member state.

The coal regions initiative is an open forum for local, regional and national governments; businesses and trade unions; non-governmental organisations; and academia that are focused on mitigating the social consequences of the EU’s transition to a low-carbon economy. It promotes the exchange of knowledge and experiences, and aims to improve each region’s ability to identify and respond to its unique context and opportunities.

SPIPA action

Based on the first experiences of the coal regions initiative, together with implementing partner the Wuppertal Institute, SPIPA initiated a multi-country activity on Just Transition. This endeavour aimed to develop a Just Transition Toolbox for Coal Regions to facilitate knowledge transfer and the exchange of experiences gained in EU coal regions, and to raise awareness and improve the knowledge of key national and provincial legislators in SPIPA partner countries.

The toolbox focuses on the social and planning aspects of regional development for areas that are phasing out coal power. It was launched and made publicly available on 1 May 2022.

In a parallel process, a series of webinars was implemented to validate research findings on the specific Just Transition issues that cropped up in SPIPA partner countries and to disseminate the contents of the toolbox, encouraging its use. .

The two thematic webinars explored the gaps between national deliberations and local action alongside a general lack of financial resources available for implementing a Just Transition in many regions. They also looked at how transitions away from coal-based power can have a strong impact on women and how coal regions face severe depopulation, and discussed what can be done to ameliorate these issues.

Country-specific webinars were co-organised with partners in the Republic of Korea, South Africa, Indonesia and India. On two occasions, peer-to-peer exchanges were arranged between EU representatives and stakeholders from South Korea’s Gyeongnam province, which has the second-largest number of coal power plants in the country, and South Korea’s largest liquefied natural gas shipping industry.

South Africa’s Council for Scientific and Industrial Research (CSIR) has investigated options that could mitigate the expected job losses at the country’s coal-fired power stations and the mines that serve them. The extensive research undertaken in the EU with the Wuppertal Institute was used to inform the discussion over which options would be most suitable, and assisted the CSIR in finalising a concrete multi-criteria decision analysis framework for a list of potential solutions.

In Indonesia, discussions on a transition away from coal are at a very early stage – a general overview of a Just Transition was exchanged – while in India there was a deep dive into the very sensitive topic of informal coal workers and how a transition away from coal-based power will affect them.

Overall, the coal sector has an important socio-economic footprint in many countries, with millions of workers employed in mining and power generation, often in poor regions. For exporting countries, reduced international coal demand will lead to structural changes with significant employment and other socio-economic impacts.

For some countries, the perceived potential impact of a national energy transition can be a deterrent for further engagement, thus slowing down implementation of their Nationally Determined Contributions. It is therefore crucial to continue supporting a Just Transition, in particular in countries and regions highly dependent on coal value chains. Diversifying local economies away from coal dependency is crucial in the context of climate change and of a global decline in demand for coal as the world moves away from fossil fuel-based power.

The accelerated coal phase-out in industrialised and emerging economies will require significant efforts. The partnership between Germany, the United States, France, Great Britain, the EU Commission and South Africa for a “socially just” coal phase-out, which was agreed upon on the fringes of COP26, may become a model for this. Other countries have already signalled their interest in similar partnerships, and Indonesia and India are possible partners in the next “round”. To support these “Just Energy Transition Partnership” approaches, SPIPA developed a short analysis of financial instruments to be engaged in a transition away from coal, focusing particularly on international assistance.

[1] UN Chief Calls for Immediate Global Action to Phase Out Coal