The Social Climate Fund (SCF or the Fund) is considered a promising tool to fill the existing gap for financing structural and proactive solutions for climate and energy injustices, which now more than ever will prove crucial to strengthen the EU’s resilience for the future.

However, the Commission’s proposal reduced the Fund to a predominantly reactive instrument, aimed at mitigating the distributional impact of an extension of the Emission Trading System to buildings and Transport (ETS 2). ETS 2 is meant to create an economic incentive to reduce fossil fuel consumption and, thus, greenhouse gas (GHG) emissions.

In itself, the SCF has significant potential to serve as a cornerstone of a just energy transition, ensuring vulnerable social groups are addressed. In this position paper, shares its recommendations for the inter-institutional negotiations between the Parliament and the Council in order to realise this potential.

  • a more substantial and impactful scope and size for the SCF, delinking the ETS 2 as a prerequisite for the creation of an SCF;
  • targeted support for low-income and vulnerable households and their empowerment;
  • acknowledgment and support for the role renewable and citizen energy communities can play in achieving the objectives of this regulation.