Coal phase-out: How Lusatia benefits from EU billions

Status: 16.08.2024 15:29

For a year now, companies in Lusatia have been able to apply for direct funding from the EU’s “Just Transition Fund”. This is intended to help cushion the negative effects of the coal phase-out. How well is it working?

Enrico Frühling, managing director of Stylework, is happy with the new CO2 laser in his Cottbus workshop. With the machine, his company can now laser three-dimensional engravings into various surfaces. An investment in the future of the company, which is active in visual marketing and produces custom-made products for trade fair and backdrop construction. “We can now produce even higher quality products and expand our portfolio,” says Frühling. “Ultimately, we were even able to create a new job as a result.”

The investment was made possible by the European Commission’s “Just Transition Fund” (JTF): Of the 270,000 euros that the machine and the conversion of the premises cost, almost 200,000 euros came from EU funds. “If there hadn’t been funding, we wouldn’t have been able to purchase the machine,” says Frühling.

Support for small and medium-sized enterprises

For a year now, companies from Lusatia have been able to apply for money from the “Just Transition Fund” at the Investment Bank of the State of Brandenburg. The aim of the fund is to counteract the negative economic and social consequences of the phase-out of coal. The EU is making a total of around 2.3 billion euros available to the German lignite mining regions in Brandenburg, North Rhine-Westphalia, Saxony and Saxony-Anhalt until 2027.

In comparison to other funding programs, the fund in Lusatia is aimed primarily at small and medium-sized companies. It thus fills a gap in structural funding following the phase-out of brown coal, which is often geared towards large-scale projects. The Federal Structural Strengthening Act, for example, supports large-scale projects in Lusatia such as the new Cottbus railway works or the “Lausitz Science Park”.

Companies can have their projects supported by the JTF in two ways: On the one hand, projects can be funded with up to 70 percent – in which case the company will receive a maximum of 300,000 euros. On the other hand, larger projects can be funded with up to 45 percent. The maximum amount here is 15 million euros.

Praise from the Chamber of Crafts

The balance after one year shows that the JTF funding program is popular with many companies. The Brandenburg Investment Bank has received almost 500 applications since last August. This corresponds to a requested grant volume of around 167 million euros. More than 65 million euros of this has already been approved – that is 186 approved applications.

The Cottbus Chamber of Crafts considers the launch of the program a success. “This is really very impressive and a very good result after one year,” says Manja Bonin, Managing Director of the Cottbus Chamber of Crafts. “We are very positively surprised and are really pleased that the companies are accepting the funds very well.”

The wide distribution of the funding is particularly pleasing. “Many industries that previously did not receive any funding are benefiting from it,” explains Manja Bonin. “We have bricklayers and concrete workers who are applying for funding here. But there are also electrical companies, metalworkers and carpenters.”

Many industries benefit

The figures from the Investitionsbank des Landes Brandenburg confirm the diverse distribution of applications across sectors: around 24 percent came from the manufacturing industry, 22 percent from the construction industry, eight percent from trade, closely followed by the hospitality industry (seven percent) and the service sector (six percent).

The subsidies are used very differently by the companies. “There are smaller digitization projects in electrical companies or metal construction companies,” says Manja Bonin from the Cottbus Chamber of Crafts. “But we also see companies that want to expand their business areas and drive innovation.” They would invest in their vehicle fleet, their machinery or their employees.

Fast and unbureaucratic

The Chamber of Crafts also praises the fact that applications can be submitted relatively unbureaucratically. “It doesn’t take much time. It’s all low-threshold. You can apply digitally. It is approved quickly. The funds are paid out quickly. As a rule, we have a lot of satisfied entrepreneurs,” says Manja Bonin. “I would like to see many state funding programs based on the JTF model.”

Entrepreneur Enrico Frühling from Cottbus is also satisfied. The application process was very simple and went smoothly. Applying for other grants or loans is much more complicated. “You only have to deal with a few authorities. If you speak to your bank and your tax advisor once, that’s enough,” he says. “Anyone who wants to get ahead as an entrepreneur in the region really has to use the grant. You can only win.”