Social Climate Fund
Estonia
Overall assessment
The Estonian Social Climate Plan has a total budget of EUR 186 million, and its focus lies in two sectors: housing and transportation. The housing sector receives the bulk of funding – over EUR 140 million, or approximately 75% of the total budget in the draft plan – primarily for the renovation of apartment buildings, with a EUR 95 million allocation for comprehensive renovations and EUR 12 million specifically to support low-income households in repaying renovation loans. A further EUR 20 million is directed toward social housing construction and refurbishment, which is essential but given the scale of need tends to be more limited.
The transport component is modest, just 21% of total funds, and focuses on electric and low-emission buses (EUR 26 million allocated) and demand-based transport services (EUR 13.5 million) to address rural mobility gaps. While positive, these measures require stronger integration with wider mobility reforms and climate targets.
Another aspect worth a mention is that while energy poverty is well-defined and targeted, community-led heating and energy projects receive no direct support, and energy communities are not referenced in the plan which could be considered a missed oppurtunity as there are no alternative public funding mechanisms for decentralised energy production in place. Citizen engagement is acknowledged in principle, but structurally underfinanced, risking limited grassroots impact.
Detailed assessment
Public participation
Public consultation quality
The quality of the public consultations has been relatively limited. Although the government consulted some umbrella organisations at the initial stage, the process did not go beyond basic consultation as in there was no meaningful dialogue, co-creation, or shared responsibility, as the development and decision-making remained primarily within ministries and state-owned agencies.
Further involvement of partners is planned during the development of national support measures, where relevant ministries will engage appropriate stakeholders through the coordination process. This will take place via the Enterprise Estonia (EIS), which serves as the platform for inter-institutional coordination and public consultation. However, the extent to which this next phase will offer more meaningful participation remains to be seen.
Cross-ministerial coordination & participation of social ministries
Social ministries were involved, and there was cross-ministerial coordination. Relevant ministries, including the Ministry of Social Affairs, the Ministry of Economic Affairs, and the Ministry of Climate, participated alongside agencies like the Statistics Estonia and the State Shared Service Centre (RTK). These actors engaged in joint workshops to address issues such as defining target groups and tackling housing-related challenges, indicating active collaboration in the drafting process.
Stakeholder consultation scope
Stakeholders were consulted to provide input and proposals to the Ministry of Finance during the drafting stage in the spring of 2024. In May 2025 a public consultation was held on housing measures with a call for feedback on the whole plan. However the second consultation for transport measures has not taken place yet (as of July 2, 2025).
Consultation timing
Civil society representatives were informed about the Plan in March 2024 and given around 3 weeks to provide input. The next public consultation took place in May 2025, with a thematic webinar on buildings and an opportunity to provide feedback on the draft plan.
Stakeholder representation
The feedback form for the Plan was sent to the EU funds monitoring committee as well as various ministries. The monitoring committee includes one environmental umbrella CSO out of its 33 members. Other NGO representation includes the Network of Estonian Nonprofit Organizations, the Estonian Union for Child Welfare, the Estonian Social Work Association, The Estonian Chamber of People with Disabilities, and The Estonian National Youth Council.
Efforts were made to reach out to underrepresented groups. The Ministry of Climate involved the State Shared Service Centre's Service in designing measures, specifically to address the more complex needs of the fund's target group. However, this mapping is still in the early stages and has not yet been actively carried out.
Stakeholder feedback integration
There were some improvements to the plan based on stakeholder input, notably the fact that support for private (electric) vehicles didn't make it in the final draft.
Arrangement to set up a standing consultation/monitoring body for the Plan
It has been implied that the Estonian Government plans to use the same system for the Social Climate Fund as for structural funds, meaning the existing monitoring structures will likely be adapted. However, additional partners may be involved if needed. The list is being refined.
Based on a meeting held on the 4th of May with Ministries of Finance and Climate, it seems they may use the MFF monitoring committee for sharing NSCP related updates, and that a separate body is not planned.
Involvement of Local Authorities
Local authorities were involved in the drafting of the plan through workshops with ministries and stakeholders on housing issues and consultations to identify local needs for transport measures. Local authorities could give their input on transportation measures. The scope and focus of the measure were designed on this basis.
Target groups
Energy poverty definition
The report on which the Estonian SCP is based on explicitly adopts the definition of energy poverty from the Energy Efficiency Directive (EED) (Directive (EU) 2023/1791)
Effective targeting of vulnerable households
The needs of low-income households are considered in relation to building renovation and transport measures. Local authorities are involved in identifying needs and providing support and some one-stop-shops are planned – with dedicated support by the European Investment Bank and the ELENA support program.
The Entrepreneurship and Innovation Foundation will provide one-stop-shop counselling services in areas where disadvantaged households are located. However, the Plan’s focus seems primarily on direct measures like building renovation, and the extent to which it actively engages intermediaries (e.g., social partners) for broader outreach and technical assistance is not very clear as of now.
Measures addressed to households that are not immediatedly impacted by ETS2
The Plan ensures vulnerable households benefit from SCF regardless of their heating source. However all of the measures are targeted towards apartment and social buildings.
Pass-on benefit guarantee (100% of benefits reaching vulnerable households)
Not enough information is available at this stage.
Types of measures and investments
Housing sector reforms & investments
There are five measures in the housing sector, two of them targeted towards municipalities (support measure for the construction and renovation of social housing and support for depopulating apartment buildings), two to apartment buildings (support for the full and phased renovation of apartment buildings) and one for vulnerable households (reconstruction support for vulnerable households).
All of the measures are targeted towards apartment buildings, while individual homes are completely ignored. The energy efficiency of buildings and heating systems is set as priority #1. Accessibility barriers for the available support instruments are somewhat addressed yet there's definitely room for improvement.
Heating & cooling sector reforms & investments
Some investments in clean heating systems could be made within the full and partial renovation measure but for now it's unclear if these investments would be eligible or not.
Measures and investments for energy communities
There are no relevant reforms and investments for energy communities in the Estonian Social Climate Plan.
Public transport & active mobility
The measure for demand-based public transportation is worth mentioning here – in Estonia, around 60 areas have been identified as needing demand-responsive public transport; the current Plan aims to launch the service in about 40 of them. The service will target regions lacking basic connectivity to local and regional hubs, considering sparse population and demographic needs. Existing or appropriately sized minibuses will be used, with routes tailored to local conditions and integrated with train and bus networks. The service will follow the county-level fare system and discounts, aiming to improve accessibility and affordability in underserved areas. The plan estimates that the number of households in transport poverty will decrease by at least 50%.
Vulnerable micro-enterprise support
The Estonian Social Climate Plan only mentions micro-enterprises in the context of support for the renovation of apartment buildings, where they can qualify for support if they operate in an apartment building.
Problematic investments
The plan includes procurement of 37 biomethane buses, which are stated to be statistically zero-emission. There are some concerns on the long-term sustainability of this measure.
Other measures and investments in the Plan are generally positive and compliant with the Do No Significant Harm Principle.
Cost-supportive measure design
Estonia did not include direct cost-support measures in its Social Climate Plan, as the chosen investment-based measures were seen as more impactful. However, civil society recommended including temporary, targeted direct support for low-income and energy-poor households, to complement structural upgrades where co-financing is not feasible.
Funding sources and policy coherence
Strategic alignment & linkages with other major national strategies & plans
The Plan aligns with the 2021–2027 Structural Funds Operational Programme and the Recovery Plan to ensure coherence and synergy between funding sources. The complementarity of measures funded by the SCF, RRF, and other EU instruments is coordinated and monitored through the national budget strategy and annual budget processes.
Mobilisation of broader ETS2 revenues
The Estonian Social Climate Plan currently does not mention whether broader ETS2 revenues will be mobilised to help tackle energy and transport poverty, in line with the objectives of the Social Climate Fund.
National expert contact: kertu.laherand@bankwatch.org
Responsible drafting authority contact: Ministry of Finance, info@fin.ee