Social Climate Fund
Regulation (EU) 2023/955 of the European Parliament and of the Council establishes the Social Climate Fund (SCF), amending Regulation (EU) 2021/1060. This fund aims to provide financial support to Member States for measures and investments that assist vulnerable households, micro-enterprises, and transport users in managing the costs associated with the transition to climate neutrality, particularly in light of the inclusion of greenhouse gas emissions from buildings and road transport within the scope of the EU Emissions Trading System (ETS).
This fund is a component of the EU's broader "Fit for 55" legislative package, which aims to reduce greenhouse gas emissions by 55% by 2030.
Purpose and Objectives:
The SCF is designed to mitigate the social effects arising from the extension of the EU Emissions Trading System (ETS) to the buildings and road transport sectors. It provides financial assistance for investments that reduce reliance on fossil fuels, such as enhancing energy efficiency in buildings, adopting clean heating and cooling technologies, integrating renewable energy sources, and promoting zero- and low-emission mobility solutions. Additionally, Member States have the option to allocate part of the resources to temporary direct income support for vulnerable groups.
Funding and Implementation:
-> The SCF pools revenues from the auctioning of allowances from the new ETS covering emissions from fuel combustion in buildings and road transport (ETS2), as well as 50 million allowances from the existing EU ETS. Alongside a mandatory 25% contribution from Member States, the fund is expected to mobilize at least €86.7 billion over the period from 2026 to 2032.
-> To access the SCF, each Member State is required to submit a Social Climate Plan to the European Commission by June 30, 2025. These plans must detail the proposed measures and investments aimed at mitigating the impact of carbon pricing on vulnerable populations. They should be formulated through consultations with local and regional authorities, economic and social partners, civil society, and other stakeholders to ensure inclusivity and effectiveness.
-> Member States are obligated to co-finance at least 25% of the total estimated costs of their Social Climate Plans, ensuring national commitment and shared responsibility in addressing climate and social challenges.
-> The implementation of the SCF will be monitored through common indicators, and Member States are required to report on progress regularly. The European Commission will evaluate the fund's performance and may propose adjustments to ensure its effectiveness.
The establishment of the SCF is part of the EU's commitment to ensuring a fair and inclusive energy transition. By providing targeted support, the fund aims to alleviate energy and transport poverty, thereby contributing to the overall success of the EU's climate objectives.
🔗 EC, EP
This fund is a component of the EU's broader "Fit for 55" legislative package, which aims to reduce greenhouse gas emissions by 55% by 2030.
Purpose and Objectives:
The SCF is designed to mitigate the social effects arising from the extension of the EU Emissions Trading System (ETS) to the buildings and road transport sectors. It provides financial assistance for investments that reduce reliance on fossil fuels, such as enhancing energy efficiency in buildings, adopting clean heating and cooling technologies, integrating renewable energy sources, and promoting zero- and low-emission mobility solutions. Additionally, Member States have the option to allocate part of the resources to temporary direct income support for vulnerable groups.
Funding and Implementation:
-> The SCF pools revenues from the auctioning of allowances from the new ETS covering emissions from fuel combustion in buildings and road transport (ETS2), as well as 50 million allowances from the existing EU ETS. Alongside a mandatory 25% contribution from Member States, the fund is expected to mobilize at least €86.7 billion over the period from 2026 to 2032.
-> To access the SCF, each Member State is required to submit a Social Climate Plan to the European Commission by June 30, 2025. These plans must detail the proposed measures and investments aimed at mitigating the impact of carbon pricing on vulnerable populations. They should be formulated through consultations with local and regional authorities, economic and social partners, civil society, and other stakeholders to ensure inclusivity and effectiveness.
-> Member States are obligated to co-finance at least 25% of the total estimated costs of their Social Climate Plans, ensuring national commitment and shared responsibility in addressing climate and social challenges.
-> The implementation of the SCF will be monitored through common indicators, and Member States are required to report on progress regularly. The European Commission will evaluate the fund's performance and may propose adjustments to ensure its effectiveness.
The establishment of the SCF is part of the EU's commitment to ensuring a fair and inclusive energy transition. By providing targeted support, the fund aims to alleviate energy and transport poverty, thereby contributing to the overall success of the EU's climate objectives.
🔗 EC, EP
- Categories
- Climate ProtectionGHG EmissionsEmissions Reduction
- Legislation instrument
- Regulation
- Pillars
- EnvironmentalSocial
- Audience
- States
- Legislation status
- In Force
- Applicable area
- EU
- Regulation (EU) 2023/955
Timeline
- ProposedJul 14, 2021
- ApprovedDec 18, 2022
- AdoptedMay 10, 2023
- PublishedMay 16, 2023
- In ForceJun 5, 2023
- In ApplicationJan 1, 2026
General Informations
Overview
EnglishInformation
Support to the Social Climate Fund and the revised EU Emissions Trading System
EnglishInformation
Good practices for the Social Climate Plans
EnglishInformation
Regulatory Instruments
Supportive Documents
List of Member States authorities responsible for the preparation of the Social Climate Plans109 kB
EnglishInformation
Commission Expert Group on Climate Change Policy289 kB
Guidance on the Social Climate Plans769 kB
EnglishGuidance
'DNSH' Technical Guidance500 kB
EnglishGuidance
'DNSH' Technical Guidance Annexes639 kB
EnglishGuidance