Guiding Principles for a Truly Just Social Climate Fund

The policy brief outlines three core principles for the implementation of the EU's Social Climate Fund (SCF): ensuring meaningful public participation, prioritising structural solutions over temporary relief to avoid fossil fuel lock-ins, and mobilising additional financing beyond the mandatory 25% contribution. It argues that the SCF's budget of EUR 65 billion is insufficient to tackle the root causes of energy and transport poverty and calls for the redirection of ETS revenues and the elimination of fossil fuel subsidies to support vulnerable households.

• The Social Climate Fund (SCF) is designed to mitigate the socioeconomic impacts of the Emissions Trading System (ETS 2) on transport and heating/cooling, but its budget of EUR 65 billion for 2026-2032 is considered inadequate to address the root causes of energy and transport poverty.
• Member States must submit National Social Climate Plans (NSCPs) by 30 June 2025, which must be operational by 2026 to precede the 2027 implementation of ETS 2.
• Effective implementation requires broad and inclusive public participation, including the use of citizen assemblies and sectoral working groups, to ensure the voices of the most vulnerable are heard and to avoid the failures of previous consultation processes like those for NECPs.
• Policy priority should shift from temporary relief (such as direct payments) to structural measures that address the root causes of poverty, specifically by improving energy efficiency in buildings and deploying zero-emission transport.
• To prevent 'lock-in' effects, the SCF must strictly exclude all fossil fuel investments, adhering to the 'Do No Significant Harm' (DNSH) principle despite the Taxonomy Regulation's classification of fossil gas as a transition technology.
• The document recommends the use of 'one-stop shops' (OSS) to provide tailored administrative and technical support for renovations, and the promotion of Renewable Energy Communities (RECs) to foster co-ownership and democratic decision-making.
• Significant additional funding is required, including the redirection of the 66% of ETS 2 revenues that go directly to Member States, the elimination of industrial pollution subsidies (which cover over 95% of industrial pollution under ETS 1), and the removal of fossil fuel subsidies.
• A long-term EU just transformation fund post-2026 is proposed to fill the investment gap left by the end of the Next Generation EU fund, supported by progressive taxes on extreme wealth and fossil fuel excess profits.

APA

Carbon Market Watch (2024). Guiding Principles for a Truly Just Social Climate Fund. https://carbonmarketwatch.org/wp-content/uploads/2024/09/Final_EU-Social-Climate-Fund-briefing-1.pdf

Chicago

Carbon Market Watch. Guiding Principles for a Truly Just Social Climate Fund. 2024. https://carbonmarketwatch.org/wp-content/uploads/2024/09/Final_EU-Social-Climate-Fund-briefing-1.pdf.

Wikipedia

{{cite report |author=Carbon Market Watch |title=Guiding Principles for a Truly Just Social Climate Fund |date=September 2024 |url=https://carbonmarketwatch.org/wp-content/uploads/2024/09/Final_EU-Social-Climate-Fund-briefing-1.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{carbonmarketwatch2024guiding, author = {{Carbon Market Watch}}, title = {{Guiding Principles for a Truly Just Social Climate Fund}}, institution = {Carbon Market Watch}, year = {2024}, month = sep, url = {https://carbonmarketwatch.org/wp-content/uploads/2024/09/Final_EU-Social-Climate-Fund-briefing-1.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }