Adopting the Social Climate Fund: The Ideal Option for the EU
Even though some weak points remain, adopting the EU’s Social Climate Fund represents a milestone in a just transition towards a low-carbon economy, writes a coalition of environmental and social NGOs.
The following op-ed is co-signed by a coalition of 17 non-governmental organisations. A full list of signatories is available at the bottom of the page.
The Social Climate Fund (SCF) is the first EU Fund specifically dedicated to providing financial support to vulnerable households, transport users and micro-enterprises in transitioning to sustainable mobility and energy consumption in buildings. Its adoption represents a milestone towards a more systematic integration of a social dimension into EU climate policies, even as some weak points remain.
The Fund’s spending rules strike the right balance between financing structural investments and providing temporary direct income support to households in need, as a new carbon price is introduced in 2027 by the new ETS for road transport and buildings (ETS2).
The investments will enable vulnerable citizens to renovate their homes, to adopt energy-efficient technologies, and to access renewable energy and sustainable transport modes. This will reduce their dependence on fossil fuels in the medium to long term, while direct income support will mitigate potential adverse effects in the short term.
Starting in 2026, the Fund should channel €86 billion to these purposes. We welcome co-legislators decision to employ the revenues from the auctioning of 50 million allowances under the existing ETS for the SCF, as well as the decision not to allocate revenues from ETS2 to the Innovation Fund.
We welcome the requirement for governments to consult sub-national administrations and civil society organisations when developing their Social Climate Plans (SCPs). We hope that the good practices developed in drafting the Plans to help the energy and transport poor will be rapidly expanded to other sources of EU finance to ensure everyone can benefit and participate in the transition to renewable energy – and not just those who can afford it.
We also welcome the inclusion of a definition of transport poverty in the SCF as it is a first in EU legislation. It will guide member states in identifying transport poor eligible for support under the Fund.
However, we regret that co-legislators reduced the amount originally allocated to the Fund in the Commission’s proposal and that the national co-financing of the Social Climate Plans (SCPs) was reduced from 50% to 25% of their estimated value.
The SCF budget is likely insufficient to significantly contribute to covering the investment and social compensation needs in road transport and buildings. The reduction of the SCF budget is only partially compensated by the obligation for member states to spend all the revenues from the ETS2 not allocated to the SCF on climate action.
- Transport & Environment
- Carbon Market Watch
- Climate Action Network – Europe
- WWF EPO
- Bond Beter Leefmilieu – Belgium
- Ecodes – Spain
- Eco-Union – Spain
- European Anti-Poverty Network
- European Heat Pump Association
- Fundacja Promocji Pojazdów Elektrycznych (Electric Vehicles Promotion Foundation) – Poland
- Germanwatch – Germany
- Institut Zielonej Gospodarki (Institute of Green Economy) – Poland
- Polish Ecological Club Mazovian Branch- Poland
- Social Platform
- Next Energy Consumer
- Focus Association for Sustainable Development