Social Climate Fund
€86.7bn (2027-2032)
The key objective of the Social Climate Fund (SCF) will be to support the most vulnerable citizens and companies affected by the extension of the EU emissions trading system (ETS2) to the buildings and road transport sectors. For the transport sector in particular, the Fund will be used for direct income support and investments in sustainable transport.
The SCF Regulation is part of the Commission’s Climate and Energy ‘Fit for 55’ legislative package to reduce greenhouse gas emissions in the EU by 55% by 2030. Between 2027 and 2032, the SCF will provide Member States with dedicated funding directly targeting the most affected vulnerable groups, such as households, in energy and transport poverty. The Member State governments may use the SCF to support structural measures and investments in zero- and low-emission mobility solutions, with the option of spending part of the resources on temporary direct income support where deemed required.
All these measures and investments will be compiled in national Social Climate Plans to be submitted by June 2025 as part of the scheduled updates to the national energy and climate plans. The plans have first to be consulted with local and regional authorities as well as other relevant stakeholders. They should include national and regional actions to carry out measures such as the uptake of zero- and low-emission mobility and transport. The Commission will then assess the plans and disburse payments to the Member States only if the milestones and targets set in the plans are achieved, building on the basic features of the current Recovery and Resilience Facility. The implementation of the Fund on the ground will focus on actions often carried out at the local and regional levels.
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 in funding. The ETS2 aims to reduce greenhouse gas emissions by 43 per cent by 2030 (compared to 2005 levels).
The final act of the revised EU ETS was published in May 2023, including a decision to set up a new emissions trading scheme starting from 2027. While entered into force on June 2023, the very SCF Regulation will apply only from 30 June 2024, which is the deadline for Member States to make the necessary adjustments in line with the revised ETS Directive.
End May 2024, UITP published a dedicated Policy Position on the SCF, showcasing how investing in local passenger transport provision and decarbonisation will become the most impactful and energy-efficient type of SCF intervention in the mobility sector, ensuring that no vulnerable transport group will be left behind during the green transition.
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