A ‘just transition’ away from coal is possible by 2030 in three of the European regions most reliant on the fossil fuel, a new analysis has found.
The study by green group WWF examined coal regions in Poland’s Upper Silesia, South West Bulgaria, and Greece’s Western Macedonia, while also considering as a case study the Ruhr region in Germany, which completed its own successful phaseout of the fuel at the end of 2018.
“Each region has characteristics that influence the specific situation and the possible solutions for a just transition. While GDP in Germany is much higher than in the other regions presented and inequality varies between them, a just transition from coal by 2030 is possible to achieve in all three,” the report said.
The coal industry in these regions is already in decline, with WWF determining the main cause in all but Greece as being driven by economic factors rather than policy.
Labour costs, restructuring towards a market economy, and the necessary extraction depths have led to the decline in Poland, the report said, while Bulgaria’s South West region has suffered resource depletion since the 1980s.
Greece is an exception, WWF added, since the rapid decline of lignite in the country’s power mix in recent years can be attributed to EU policy changes such as the EU ETS and the implementation of stricter emission limits through the Industrial Emissions Directive (IED) and the Large Combustion Plant Best Reference Document (LCP BREF).
In all four countries, the coal industry’s relative impact on national GDP is small. However, at local level it can be massive, with the coal industry accounting for up to 75% of the economy, the study said.
WWF noted that each region is at a different stage in the transition away from coal, and is illustrating differing approaches by government and industry.
For example, a coal mining phaseout in the Ruhr region of Germany had been planned for decades, while no strategy is in place in South West Bulgaria as the region “is being left behind”.
The report also noted that unemployment in the three regions is poised to skyrocket amid any coal phaseout, with significant dismissals already under way in Bulgaria and Greece.
“In the absence of policies to address the educational structures and implement appropriate support, just transition will be no more than a dream here,” WWF said.
“Failure to accept and embrace change in favour of reinforcing and attempting to preserve the status quo is a problem in all of the transition regions,“ it added.
In Germany’s Ruhr, such policy decisions – including the ending of coal subsidies – delayed the transition, raising costs considerably and lumping taxpayers “with a drawn-out, 60-year transition at an estimated cost of estimated between €150-340 billion”.
“The three other transition regions in this study do not have 60 years to make the change or the funds that the Ruhr area had at its disposal,” WWF added.
The campaigners asserted that the shift to a low-carbon economy need not be at the expense of any of these areas or their workers.
Based on the regions’ characteristics, WWF identified the following points as being key to any just transition strategy:
- Set a phase-out date for coal as early as possible, followed by an agreed and consensual, timeline-based transition strategy. Ensure a clear timeline with a binding and ambitious phase-out date for coal provides certainty to investors. Avoid the creation of stranded assets and lowering the overall costs of the transition.
- Ensure timelines and strategies are based on high-quality, quantitative information. To be meaningful, effective, and have the greatest chance of success, just transition strategies and plans should be informed by quantified, transparent, and objective analysis. They should also be formulated with the aim to achieve true environmental sustainability in order to ensure that the transition is durable.
- Ensure adequate, targeted financial and policy support for the transition using EU as well as national funds. The transition requires upfront investment, which cannot always be made by investors alone. Long-term policy support and frameworks, supported by dedicated public financing are necessary to leverage the sustained investment required for a just and sustainable transition.
- Aim for real economic diversification. A diverse collection of smaller businesses and industries provides resilience to economic change, with big economic changes having a lower impact on overall employment and the GDP.
- Engage all stakeholders in an ongoing process, especially at local level. Their involvement can determine whether the transition succeeds or whether it is delayed, resisted, and derailed. Local stakeholders and communities are more likely to buy into the strategies and will support their implementation if they were the driving force behind developing them. Local communities also have unrivalled insight into their needs and desires, even if on their own they do not have the resources or expertise to actualise them. Failing to involve local communities will risk missing essential information into their needs, desires, and strengths and can drive resistance to change.
The report comes as the EU prepares to discuss its proposed ‘Just Transition Mechanism’ to help regions get reach carbon neutrality by 2050 by leveraging €100 billion.
“Coal regions have contributed to Europe’s prosperity for decades. We need to make sure Europe’s transition towards a net zero emissions economy does not happen at the expense of these regions,” said Juliette de Grandpre, senior policy adviser at WWF Germany.
“Local and national authorities have a key role to play and need to talk to those affected and ensure the right financial and policy support is there to allow a smooth path to a net zero emissions economy based on sustainable jobs for all.”
Imke Luebbeke, head of climate and energy at WWF’s European Policy Office, added: “Getting the just transition right in our coal mining regions is one of the biggest challenges – and opportunities – of the next decade.”