The Social Climate Fund (SCF) was created alongside the ETS2, the EU’s emissions trading system covering fuel combustion in buildings, road transport and additional sectors. The primary goal of the SCF is to alleviate the social and economic impacts arising from the ETS2, ensuring a fair transition to climate neutrality. To achieve this, the SCF will provide EU Member States with dedicated funding to directly support the most affected vulnerable groups, notably households in energy or transport poverty, making sure they are not left behind in the transition to a cleaner economy.
The SCF will support people all around the EU. 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 for zero- and low-emission mobility solutions. Member States will also have the option of spending part of the resources on temporary direct income support.
To access funding, Member States will draft national Social Climate Plans that list and explain all planned measures and investments in support of vulnerable households, transport users, and micro-enterprises. The plans should be based on a country-wide consultation of local and regional authorities, representatives of economic and social partners, civil society, and youth organisations, as well as other stakeholders. This is to ensure that the measures and investments mentioned in the plans will adequately target and effectively support the most vulnerable groups. Member States are to submit their plans to the European Commission by June 2025. The Commission will assess them and disburse payments to 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 EUR 86.7 billion of public funding over the 2026-2032 period.