With the adoption of the European Green Deal in December 2019, climate change and environmental challenges are now at the top of the EU political agenda. The main objective of the European Green Deal is reaching a climate neutral Europe (that is, net-zero greenhouse gas emissions (GHG)) by 2050.
In order to set the EU on a sustainable path to achieve climate neutrality by 2050, in September 2020 the Commission has proposed an EU-wide, economy-wide net greenhouse gas emissions (GHG) reduction target by 2030 compared to 1990 of at least 55% in its ‘Communication on stepping up Europe’s 2030 climate ambition’. Building on that Communication and on the existing 2030 legislation, the Commission will review and propose to revise, where necessary, the key relevant legislation by June 2021.
The transition to a sustainable and climate-neutral economy will require substantial investments across Europe. To alleviate the negative socio-economic impacts of the transition, the European Green Deal includes a Just Transition Mechanism, comprising a Just Transition Fund (JTF) as its first pillar.
Lithuania’s GHG intensity per value added produced in the Lithuanian manufacturing industry, due to the historical structure and dominant technologies, is among the highest in the EU due to a generally large energy intensity of the Lithuanian economy and to a few highly GHG-intensive industrial installations. Transition to a low-carbon economy will put considerable pressure on the most GHG-intensive industries in Lithuania, which are:
- Fertilizer manufacturing
- Oil refining
- Heat and power production
- Peat extraction
According to information provided in the Lithuanian National Energy and Climate Plan, the estimated overall amount of public and private investment needed for financing GHG reduction measures for the period 2021-2030 is EUR 14.1 billion. The Commission estimates that the investment needs correspond to average annual investments of around 3% of GDP (based on GDP in current numbers reported in Eurostat for the year 2019 of EUR 48.339 billion.)
The most GHG-intensive installations are located in Kaunas, Telšiai, Klaipėda and Šiauliai Counties. These installations are also major sources of employment and income in their municipalities, directly employing up to 10% of the labour force and many more people indirectly. This demonstrates the importance of mitigating the social and economic impacts of the transition.
It is estimated that Lithuania might receive a total amount of €247.5 million from the Just Transition Fund for the period 2021-2027. To access the support of the Just Transition Fund, Lithuania needs to prepare Territorial Just Transition Plans (TJTPs) in line with her National Energy and Climate Plan. The TJTPs will provide an outline of the climate-neutral transition process until 2030, identifying the most impacted territories and the specific activities that should be supported in those territories, such as emission reduction measures, economic diversification, up-skilling and reskilling, environmental rehabilitation and others.
With the support of the European Commission and international consultants mobilised via the Structural Reform Support Programme managed by the Directorate General for Structural Reform Support (DG REFORM), in October 2020 the Lithuanian Ministry of Economy and Innovation started work on the preparation of territorial just transition plans for Lithuania. The EU-funded work will run until May 2021 and will result in concrete proposals for: i) the governance mechanism and the stakeholders’ engagement strategy; ii) the transition process to climate neutrality; and iii) the challenges, needs and action plans for the most affected regions.
Mario Nava, Director-General of DG REFORM, said: This project is crucial to support Lithuania in her efforts to mobilise resources available under the Territorial Just Transition Fund and to contribute to the overall objectives of transitioning toward a climate neutral economy. We are eager to support Lithuania in this urgent endeavour and to cooperate with international and local consultants in helping Lithuania drafting its plans for a truly just transition towards climate neutrality that leaves no one behind.
The Ministry of Economy and Innovation has established a National Working Group comprising all relevant governmental, regional, municipal, non-governmental stakeholders and social partners, in order to take part in the preparation of the Territorial Just Transition Plans, as well as to analyse the information provided by experts, make proposals and comment on those Plans.
For more information, contact: Aurelija Kazlauskiene, Lithuanian Ministry of Economy and Innovation; e-mail: Aurelija.Kazlauskiene@eimin.lt