FAQ Social Climate Fund

The Social Climate Fund (SCF) is an EU initiative designed to alleviate energy and transport poverty resulting from the introduction of the ETS2 carbon pricing system for buildings and road transport. Operating from 2026 to 2032, the fund will provide approximately €86.7 billion in targeted support to EU member states, primarily for lower-income groups and micro-enterprises. Funding is allocated based on need, with Poland, France, Italy, Spain, and Romania receiving the largest shares. To access funds, member states must submit Social Climate Plans (SCPs) by June 2025, which must include impact assessments and decarbonisation strategies. While the SCF supports green investments and limited temporary income support, it is not intended to solve the root causes of existing energy and transport poverty.

• The Social Climate Fund (SCF) is designed to mitigate the social risks of the ETS2, a new Emissions Trading System applying carbon prices to buildings and road transport starting in 2027. The SCF aims to prevent increases in energy and transport poverty by increasing the "accessibility and affordability of clean alternatives to lower income groups and micro enterprises against rising energy costs."
• Between 2026 and 2032, the SCF will provide a total of €86.7 billion in support. This consists of a maximum of €65 billion in targeted support financed by auctioning allowances from ETS1 (50 million) and ETS2 (at least 150 million), supplemented by a mandatory 25% co-financing requirement from member states.
• Funding is distributed to EU member states based on need, with the highest allocations going to Poland (17.6%), France (11.2%), Italy (10.8%), Spain (10.5%), and Romania (9.3%).
• To receive funding, member states must submit Social Climate Plans (SCPs) by June 2025. These plans must include estimates of the ETS2's effects on vulnerable groups, actionable policies for decarbonisation, and evidence of public consultation. However, as of June 2024, the 26 submitted National Energy and Climate Plans (NECPs) were all assessed as not containing "sufficient information for the preparation of Social Climate Plans."
• The SCF primarily funds green investments such as energy-saving renovations, decarbonised heating/cooling, and zero-emission vehicles. A maximum of 37.5% of the fund can be used for temporary income support, and 2.5% is allocated for public consultation, studies, and technical assistance.

APA

Scott, E. (2024). FAQ Social Climate Fund. Carbon Market Watch. https://carbonmarketwatch.org/2024/07/01/faq-social-climate-fund/

Chicago

Scott, Eleanor. FAQ Social Climate Fund. Carbon Market Watch, 2024. https://carbonmarketwatch.org/2024/07/01/faq-social-climate-fund/.

Wikipedia

{{cite report |last1=Scott |first1=Eleanor |title=FAQ Social Climate Fund |publisher=Carbon Market Watch |date=1 July 2024 |url=https://carbonmarketwatch.org/2024/07/01/faq-social-climate-fund/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{scott2024faq, author = {Scott, Eleanor}, title = {{FAQ Social Climate Fund}}, institution = {Carbon Market Watch}, year = {2024}, month = jul, url = {https://carbonmarketwatch.org/2024/07/01/faq-social-climate-fund/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }