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The Social Climate Fund

Established in 2023, the Social Climate Fund (SCF) provides funding to EU Member States to support vulnerable households, including those affected by energy poverty, and vulnerable micro-enterprises, by supporting investments for increased energy efficiency.

The SCF is part of the “Fit for 55 in 2030 package”, to reduce greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels in line with the European Climate Law. The SCF will start in 2026, one year before the Emissions Trading System (ETS) is extended to cover buildings and road transport (the so-called “ETS II”). If energy prices are exceptionally high, the ETS extension may be postponed by one year.

The SCF is meant to benefit vulnerable households, micro-enterprises and transport users that are particularly affected by energy and transport poverty. Only measures and investments that respect the principle of ‘do no significant harm’ and aim to reduce fossil fuel dependency will receive support.

The SCF will cover two types of initiatives:

  1. Temporary direct income support measures to tackle the increase in road transport and heating fuel prices, with a limit of up to 37.5% of the total estimated cost of each national plan.
  2. Long-lasting structural investments, including energy efficiency and buildings renovation, clean heating and cooling, decarbonisation solutions and integration of renewable energy, purchasing and infrastructure for zero- and low-emission vehicles, as well as the use of public transport and shared mobility services.

In order to access the funds, EU countries are expected to submit nationalSocial Climate Plans”, after consulting with local and regional authorities, economic and social partners as well as civil society. By June 2025, Member States will submit their national Social Climate Plans to the European Commission which will assess them and issue payments upon achievement of the milestones and targets set in the plans.

The European Commission has launched a 2024 Flagship Technical Support Project to support Member States’ local, regional and national authorities  with the preparation of their national Social Climate Plans.

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