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Climate Action

Social Climate Fund

EU Emissions Trading System (EU ETS) and the Social Climate Fund

About the Social Climate Fund (SCF)

The SCF was created alongside the ETS2 for emissions from fuel combustion in buildings, road transport and additional sectors. It will provide Member States with dedicated funding so that the most affected vulnerable groups, such as households in energy or transport poverty, are directly supported, and not left behind during the green transition.

Member States may use the SCF to support structural measures and investments in energy efficiency and renovation of buildings, clean heating and cooling and integration of renewable energy, as well as in zero- and low-emission mobility solutions. Moreover, Member States will have the option of spending part of the resources on temporary direct income support.

All these measures and investments will be compiled in national Social Climate Plans following a country-wide consultation. Member States will submit these plans to the European Commission by June 2025. The Commission will assess the plans and disburse payments to the Member States only if the milestones and targets set in the plans are achieved.

To finance these measures and investments in support of the most vulnerable groups, the SCF will pool revenues from the auctioning of allowances from the ETS2 as well as 50 million allowances from the existing EU ETS. Together with a mandatory 25% contribution of the Member States to their Social Climate Plans, the SCF should mobilise at least €86.7 billion over the 2026-2032 period.

To facilitate the implementation of the SCF, the Commission launched a dedicated initiative to help Member States develop their Social Climate Plans under the Technical Support Instrument. The Commission is also enabling an exchange of good practices among Member States through a dedicated formation of the Commission Expert Group on Climate Change Policy (CCEG).

Public consultation

Have your say on the application of the Do No Significant Harm (DNSH) principle to the Social Climate Fund (SCF) – check out our targeted public consultation on the topic!

Documents

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