This box draws attention to the fact that a just transition is not happening, especially in Central and Eastern European Countries, which sets an urgent challenge to social convergence.
Country-specific recommendations miss the huge gaps between member states. If the EU is doing well for Europe’s renewables as a whole, the transition is not happening at the scale we
need in CEE Member States. The EU industrial policy strategy must account for regional disparities and come up with concrete solutions for addressing intra-EU cleavages. Germany
and France account for almost 80% of state aid approved under the new state aid rules. Our citizens face some of the highest energy poverty rates. Between 2010 and 2021, Co2
emissions in Central and Eastern Europe reduced at half the rate of the overall EU over the same period. The most comprehensive tracker of clean tech manufacturing and deployment in
Europe shows that today, in practically every sector, from solar to heat pumps, our countries are being left behind. Reliable, cheap and clean energy is vital to power the industry and its
transformation, yet our region’s vast potential for solar and wind power is not realised. 50% of the EU’s coal consumption comes from the CEE Member States, yet the means to fully
support the transition is lacking. By 2030, 160,000 direct jobs in the coal sector could be lost.
The indirect jobs affected often amount to triple the number of the direct jobs affected, as companies from the supply chain or the services industry cannot thrive without well-paid
workers, themselves consumers. The funding and legislation so far provided to address the scale of this challenge is vastly insufficient. For example, in May 2021 Polish mining unions signed a Social Plan for workers in the hard coal sector where they agreed to phase out hard coal production by 2049. Yet, the Polish government has not notified the Commission about state aid that this would imply, and the 83,000 workers still remain uncertain about their future.
CEE states are being hampered by an imbalance of financial and administrative capacity to transition their industries. Relatively weak administrative capacity at the local level is also a leading cause of the structural problem of insufficiently high absorption of EU funds[9]. In Bulgaria, €100 million of potential EU funding for the coal transition was missed at the end of
2022 because the government could not submit the required documentation on time. Out of 184 demonstrators of technologies for climate neutrality in energy-intensive industries financed
via the EU, only 11 are being implemented in the CEE Member States. The implications of this challenge are vast, as until 2027, CEE countries will have to absorb EU funding that amounts to
up to 8% of GDP. The EU fiscal rules remain a significant barrier to transition. Under the recently adopted rules, not one of the 11 CEE countries can spend enough to meet social and green investment needs[14]. Basic infrastructure such as energy grids and transport networks, upon which industry, households and the climate transition rely, requires huge up-front investment.