EU Cohesion Policy: €155.7 million for a just climate transition in Sweden

This article is brought to you in association with the European Commission.

Thanks to the Just Transition Fund (JTF) Programme adopted by the Commission, Sweden will receive €155.7 million in EU grants to support the country’s efforts to achieve climate neutrality by 2045 and alleviate the impact of the climate transition. Sweden will mobilise a total investment of €311.5 million to help making sure that this transition will not leave anyone behind in the local economy and society. 

Executive Vice-President for the European Green Deal, Frans Timmermans, said: “Sweden’s aim to be climate neutral five years ahead of the EU target is truly commendable. The faster we transition to climate neutrality, the better we can mitigate the impacts of the climate crisis. The support from the Just Transition Fund agreed in this plan will help Sweden meet its targets in an inclusive and fair way, offering new perspectives to workers in the country’s most industry-heavy regions.”

Commissioner for Cohesion and Reforms, Elisa Ferreira, said: “Industrial counties of Sweden produce a significant part of the country’s greenhouse gases. With the adoption of the Just Transition Fund, we are helping Sweden curb the emissions while protecting the local population against its negative economic and social consequences.”

The JTF support will help Swedish industry transition to climate neutrality, while maintaining competitiveness and sustaining economic and employment levels in the counties of Norrbotten, Västerbotten and Gotland. As industrial emissions account for 32% of Sweden’s total greenhouse gas emissions, the transformation of the steel, mineral and metals industry, main greenhouse emitters, will have an important socio-economic impact. The JTF will help alleviate this impact by investing in research and innovation and in the retraining and reskilling of workers.

Because of the scale of the decarbonisation challenge, the JTF will also support targeted investments to reduce greenhouse gas emissions in activities covered by the Emissions Trading System, such as steel and cement production. These investments are essential to maintain jobs in these sectors and will ensure that the emissions will be significantly reduced, in line with the requirements of the JTF Regulation.  

Finally, €9 million of the JTF will contribute to the increased capacity of Gotland’s electricity grid. A strengthened electricity grid on the island of Gotland as well as an increased share of renewable electricity generation are prerequisites for the conversion of the cement plant in the county.

Background

The JTF supports the territories most affected by the transition towards a climate-neutral economy. The identification of these territories is specified in Territorial Just Transition Plans (TJTPs) and it is carried out through a dialogue with the Commission in the framework of the negotiations of the 2021-2027 Partnership Agreements and the associated programmes. The TJTPs, developed in close consultation with local partners, set out the challenges in each territory, as well as the development needs and objectives to be met by 2030. They also identify the types of operations envisaged along with specific governance mechanisms.

The approval of TJTPs 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 Europe-wide over the period 2021-2027 in the most affected regions to alleviate the socio-economic impact of the transition.

The Commission approved the Partnership Agreement in Sweden in June 2022. The agreement includes significant investments – 30% of the European Regional Development Fund (ERDF) – in measures supporting a climate smart economy and a sustainable environment.

Besides the JTF Programme, two ERDF programmes linked to the Partnership Agreement are also approved: the regional programme of the North Central Sweden region and the programme of the region of Stockholm. The six other ERDF regional programmes, as well as the national ERDF programme, are expected to be adopted before the end of 2022.

Upon request by the Swedish Authorities, the Commission provided tailor-made technical expertise for the preparation of the TJTPs in terms of advanced technical and regional knowledge. The support was provided by the Technical Support Instrument under DG REFORM.