Finland will receive more than €465 million from the Just Transition Fund(JTF), thanks to the adoption today of its Territorial Just Transition Plan (TJTP). This JTF funding represents about 24% of the Cohesion Policy allocation for Finland in 2021-2027 and supports its ambition to reach climate neutrality by 2035 by making that path socially just and fair for all citizens.
The JTF will invest in the 14 regions where the peat transition will have a substantial economic and social impact. Those regions are South Karelia, South Ostrobothnia, South Savo, Kainuu, Central Ostrobothnia, Central Finland, Kymenlaakso, Lapland, Ostrobothnia, North Karelia, North Ostrobothnia, North Savo, Satakunta and 4 municipalities of Pirkanmaa, namely Punkalaidun, Virrat, Parkano and Kihniö.
Phase out of peat extraction
Finland is one of the main producers and main consumers of peat in Europe. 90% of the peat produced is used as an energy source. The CO2 intensity of peat-based energy production is equivalent to that of coal-based production. In Finland, the JTF aims to halve the energy use of peat by 2030. To support the transition to a just low-carbon economy, the Fund will specifically support the diversification of livelihoods, revitalising economic structures and boosting employment by reskilling and upskilling the workforce working in peat extraction and related sectors, especially young people. For example, it will help develop peat industry operators’ competences in wood harvesting and peatland restoration in order to create new businesses and new jobs. Furthermore, peat fields will be restored back to carbon sinks where possible.
Support for green jobs and SMEs
The JTF will be directed at jobs in the green economy, new green technology solutions and related new business opportunities. The Finnish plan will support about 1,900 SMEs in transition regions, which are suffering from economic decline and specific challenges caused by peripheric locations. The Fund will also provide new opportunities for businesses to cooperate with research institutes: around 4,000 businesses will benefit from this opportunity. Thanks to this, 1,800 new innovations, services or products are expected. The aim is to create 3,700 new jobs in the areas most significantly impacted by the transition to a climate neutral economy.
Background
The JTF supports territories that are particularly affected by the transition towards a climate-neutral economy. The TJTPs identify these territories with the Commission during the negotiations of the 2021-2027 Partnership Agreements and the associated programmes. The Commission approved the Partnership Agreement with Finland in May 2022.
The Territorial Just Transition Plans for Finland have been adopted as part of a multi-fund programme for the European Regional Development Fund, the European Social Fund+ and the Just Transition Fund.
The close consultation with local partners permitted to identify the challenges and development needs in each territory, and the objectives to be met by 2030. TJTPs also identify the planned actions with specific governance mechanisms.
The approval of the TJTPs also opens the door to dedicated financing under the other two pillars of the Just Transition Mechanism(JTM): a just transition scheme under InvestEU and a Public Sector Loan Facility for Just Transition that combines Commission grants with European Investment Bank loans.
The JTM is a key tool to ensure that the transition towards a climate-neutral economy happens in a fair way, leaving no one behind. It provides targeted support to help mobilise around €55 billion over the period 2021-2027 in the most affected regions. Lastly, the Just Transition Platform helps to accelerate the just transition by involving all stakeholders sharing experiences and best practices.
Upon request by the Finnish Authorities, the Commission provided tailor-made technical expertise for the preparation of the TJTPs. Support included the analysis and assessment of the social, economic, and environmental impact of the transition, as well as an action plan to ensure the just transition in the concerned regions. The support was provided by the Technical Support Instrument under DG REFORM.
More information
The Just Transition Mechanism: making sure no one is left behind
The Just Transition Platform: Accompanying Member States and regions to achieve a just transition
Breakdown of Just Transition Fund allocations per Member State
Questions and Answers on the EU Cohesion Policy legislative package 2021-2027
Quotes
The just transition plan for Finland demonstrates the importance of Cohesion Policy in responding to the economic and social challenges of the EU regions. The additional funding will facilitate Finland’s just transition and support the country’s ambition to reduce peat-based energy and build up a cleaner environment. The Just Transition Fund will be invested to compensate for the socio-economic and environmental effects of halving the use of peat for energy and to help Finland’s most impacted regions renewing their economic structures, boosting employment, and reskilling the workforce. We will also make sure to support the restoration of peatland.
Finland has an ambitious target to be climate neutral by 2035. To achieve this target, it will be crucial to reduce the use of peat in Finland’s energy mix. The support via the Just Transition Fund will enable workers in the peat sector to find new jobs and help restore peatlands so that they absorb carbon instead of emitting it. The Green Deal is built on the premise of proving it is possible to have a fair transition to climate neutrality and the European Commission is on Finland’s side as it aims to become the world’s first fossil-free welfare society.