EU Just Transition Fund would support diversification of Ida-Viru economy

Map of Just Transition Fund proposed territorial eligibility.
Map of Just Transition Fund proposed territorial eligibility. Source: European Commission

According to proposals drawn up by the European Commission, investments made in Ida-Viru County via the Just Transition Fund (JTF) to be established in support of achieving the European Union's carbon neutral goals are to go primarily toward diversifying the region's economy and training employees.

Diversifying the region's economic activity, the generation of new business opportunities and the upskilling and reskilling of the region's workers are crucial, it is noted in an analysis (link to PDF) compiled by the European Commission which should provided the basis for dialogue between Estonia and the Commission.

According to the Commission, in order to achieve the desired transition, the JTF should target investments in small and medium-sized enterprises (SMEs), including startups; investments in the creation of new companies, including via business incubators and consulting services; as well as investments in the deployment of technology and infrastructure for affordable clean energy, greenhouse gas emission reduction, energy efficiency and renewable energy.

In order to increase the region's resilience and alleviate potential negative social and economic impacts posed by the transition, the Commission recommends investing in several key areas: research and innovation activities; digitalization and digital connectivity; regeneration and decontamination of sites as well as land restoration and repurposing projects; enhancing the circular economy; and job-seeking assistance to jobseekers, and the active inclusion thereof.

The Commission's proposals are aimed at the next budgetary period of 2021-2027.

The Ida-Viru region provides 75 percent of Estonia's energy production. The oil shale sector accounts for 4 percent of Estonia's GDPand 45 percent of Ida-Viru County's GDP, and generates 69 percent of Estonia's greenhouse gas (GHG) emissions.

Decarbonization-related restructuring in the region's energy and oil shale industries will have a significant impact in direct and indirect jobs at risk in the county, where the number of oil shale sector jobs is decreasing and expected to drop further. The Commission estimates the number of people indirectly impacted by the process to be around 20,000. Demand for labor in the region is limited, however, and combined with skills mismatches, many people are expected to be at risk of unemployment.

The EU has promised to achieve carbon neutrality by the year 2050.


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Editor: Aili Vahtla

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