Greece’s just transition strategy for lignite workers

As part of Greece’s energy transition, the government announced a phase out of lignite by 2028. The transition will require decommissioning of lignite power plants and mines, which will create economic and employment disruptions in ligniteproducing areas, especially in Western Macedonia, where 80% of the country’s lignite is produced. To help manage an efficient transition for impacted regions and communities, Greece created a Fair Transition Fund in 2018, which will support the diversification of local economies and job creation in lignite dependent areas. The fund is financed by 6% of revenues from auctions of allowances under the EU Emissions Trading System, amounting to around EUR 20 million annually. For both the Dytiki Makedonia and Peloponnesus coal-mining regions, Greece participates in the Initiative for coal regions in transition that offers technical assistance and capacity building toward the development of inclusive transition strategies and roadmaps.

In 2020, Greece submitted a detailed plan for managing a just transition for its coal regions to the European Commission, supported by the World Bank and the EC’s Directorate-General for Structural Reform Support. The roadmap included findings from a comprehensive, multi-disciplinary research project that examined key topics for a transition away from lignite in Western Macedonia. The proposed transition strategies identified in the plan include, among others, an alternative energy transition pathway that leverages the energy-related skills and social identity of the region as well as a digital regional transition approach that would expand science, technology, engineering and math (STEM) and robotics education in public schools. Given the exceedingly high unemployment rates in Western Macedonia, the roadmap calls for an employment strategy that considers the broader picture, providing employment opportunities, training and retraining for youth, the long-term-unemployed, as well as individuals affected directly and indirectly by the transition out of coal. The workforce assessment found that, as of June 2020, around 5 200 workers were directly impacted by the lignite phase out. After 2023, workers in the sector will mainly comprise mine technicians, with a smaller number of engineers and administrative and support staff. A large number of temporary workers would also be negatively affected. According to estimates by the Institute for Economic and Industrial Research (IOBE), the Greek coal (lignite) regions will suffer a loss of EUR 1.3 billion in their GVA by 2029 compared to 2019. As regards job creation, IOBE estimates that coal regions will cumulatively lose around 14 000 jobs by 2029 compared to 2019.

Under Greece’s 2021 Recovery and Resilience Plan, the government announced measures to improve green skills through training programmes in resource efficiency, low-carbon industry, climate reliance and managing natural assets. The Plan also includes investment to rehabilitate industrial land and creates the basis for further developing low carbon investment. The measures aim to ensure a just transition in view of the phasing out of lignite, notably in Western Macedonia and Central Peloponnesus. In the framework of the Just Transition Fund (JTF) programme and plans adopted in June 2022, Greece will mobilise a total investment of EUR 1.63 billion to alleviate the impact of the energy and climate transition on the local economy and society in the territories most affected. The programme will support decarbonisation in Western Macedonia and Peloponnesus as well as the phasing out of fossil fuel power stations in the islands of North-South Aegean and Crete. Support from the JTF programme will foster the diversification and modernisation of the economy through creating new jobs as well as through upskilling and reskilling people affected by the transition. This includes training and retraining in digital skills and cutting-edge technologies, with a focus on vocational training and human resource certification actions and jobsearch assistance. 

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