Just Transition Fund supports regions in renewing their economic structure and boosting employment

Ministry of Economic Affairs and Employment
Publication date 20.10.2022 13.53 | Published in English on 20.10.2022 at 17.06
Press release
Innovation and Skills in Finland 2021–2027. Co-funded by the European Union.

The Government approved an amendment to the EU regional and structural policy programme Innovation and Skills in Finland 2021–2027 concerning the Just Transition Fund (JTF) and decided to submit it to the European Commission.

The JTF belongs to a package of measures, which the European Union has created to achieve its carbon neutrality target by 2050. The Fund mitigates the socio-economic and environmental effects that decarbonisation causes to regional economies and employment in the EU.

In Finland, the Fund aims to halve the energy use of peat by 2030, as outlined in the Government Programme. The Fund will compensate for the socio-economic and environmental effects of halving the use of peat for energy. The JTF measures will be targeted at renewing economic structures, boosting employment, reskilling of especially young people working in the peat sector and at restoration and after-use of peatland.
“The JTF promotes technological transformation and facilitates the new business opportunities it creates. The vitality of regions and of rural areas, in particular, will be developed while we are moving towards a low-carbon future,” says Minister of Economic Affairs Mika Lintilä.

JTF measures create new jobs and business opportunities and reskill especially young people working in the peat sector

The JTF-related programme amendment includes an environmental report and plans for regional transition that have been drawn up under the leadership of regional councils and ELY Centres. However, the Fund’s measures are not limited to peat regions, as the adverse effects of reducing the use of peat could extend to a larger geographical area. The plans have been drawn up for South Karelia, South Ostrobothnia, South Savo, Kainuu, Central Ostrobothnia, Central Finland, Kymenlaakso, Lapland, Ostrobothnia, North Karelia, North Ostrobothnia, North Savo and Satakunta. The municipalities of Punkalaidun, Virrat, Parkano and Kihniö in the Pirkanmaa region are also included in the plans.

The employment impact of peat industry in Finland is about 2,500 man-years. The considerable reduction of the peat energy sector will have significant direct and indirect effects on regional economies and employment. To reinforce regional economies and vitality, the measures in the regional transition plans would be directed at creating jobs in the green economy, finding new green technology solutions and facilitating new business opportunities created by green technology. Measures for the reskilling and reemployment of workforce would primarily be targeted at those who have lost, or are at risk of losing their jobs in the peat sector, particularly young people. 

Funds from the JTF available to regions in early 2023 

The European Commission approved the Innovation and Skills in Finland 2021–2027 programme on 5 May 2022. The programme includes the measures of the European Regional Development Fund (ERDF) and the European Social Fund Plus (ESF+). The aim is that the Commission approves the JTF measures as part of Finland’s programme before the end of the year. 

About EUR 466 million in EU funding is available from the JTF. National co-financing from the central government and local governments amounts approximately to EUR 200 million in the Fund. The total amount of public financing is, then, approximately EUR 665 million in 2021–2027. 

Sonja Hällfors, Special Adviser to the Minister of Economic Affairs, tel. +358 29 504 7380
Petri Haapalainen, Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 506 4922
Valtteri Karhu, Chief Specialist, Ministry of Economic Affairs and Employment, tel. +359 29 504 7209