The Fair Transition Fund is a new financial instrument in the area of cohesion policy which aims to support territories facing serious socio-economic challenges arising from the process of transition to climate neutrality. The Fair Transition Fund will facilitate the implementation of the European Green Pact, which aims to achieve a climate neutral Union by 2050.
As part of the European Green Pact and with the aim of achieving the Union's climate neutrality in an effective and fair manner, the European Commission proposed the creation of a Mechanism for a Fair Transition which includes a Fair Transition Fund. He indicated that the Mechanism should focus on those regions and sectors most affected by the transition, given their dependence on fossil fuels.
The Mechanism consists of three pillars.
- a. the Fair Transition Fund;
- b. a specific scheme under the InvestEU programme;
- c. a public sector loan mechanism with the European Investment Bank to mobilise additional investments in favour of the affected regions.
The Fair Transition Fund mainly provides grants. The specific transitional regime under InvestEU attracts private investments. The activities of the European Investment Bank must mobilise public funding.
For further information on the Fair Transition Fund: