Poland, Germany and Romania are set to receive the biggest share of the European Union’s fund to create a climate-neutral economy in Europe by 2050.

The 17.5 billion euro ($21.27 billion) Just Transition Fund (JTF) combines money from the EU's budget and its COVID-19 recovery fund. The JTF is one of the three pillars of the Just Transition Mechanism (JTM) which is part of the European Green Deal.

It is designed to support communities most affected by plans to shut down coal, peat and oil shale sectors or other emissions-intensive industries. It will back projects including managing closures of coal mines and retraining workers.

Replacing carbon-heavy sectors with green industries and jobs is key to putting the EU on track for its target to have zero net greenhouse gas emissions by 2050.

To receive funds, countries must submit plans to the European Commission for approval, showing how they will use the cash to transition to greener industries. JTF money cannot be spent on nuclear power or fossil fuels, including natural gas.

Poland is in line for the biggest share, followed by Germany and Romania – countries that have established coal-mining regions. However, the Commission has warned the Polish region of Bogatynia will not receive funding if the government presses ahead with a plan to keep its Turow coal mine open until 2044. Owned and operated by state-owned utility Polska Grupa Energetyczna (PGE), the mine has been in production for more than 115 years since 1904.

The approval of an extended licence for the open pit mine in April by Poland’s Climate Ministry raised concerns from neighbouring countries the Czech Republic and Germany, as well as environmental campaigners.

EU countries have adopted the JTF regulation, the final hurdle before it enters into force. Portugal chairs meetings of EU ministers until July and Portuguese planning minister Nelson de Souza said: "The Just Transition Fund will provide much-needed support to companies and workers at local level.”

The Commission had proposed putting 40 billion euros in the fund, although the amount was cut during negotiations between EU countries last summer over the bloc's budget.

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