Social Climate Fund

SUMMARY OF:

Regulation (EU) 2023/955 establishing a Social Climate Fund and amending Regulation (EU) 2021/1060

WHAT IS THE AIM OF THE REGULATION?

As part of the fit for 55 package, it sets up the Social Climate Fund designed to be used by European Union (EU) Member States to:

support measures and investments to reduce emissions in the road transport and building sectors, reducing costs for vulnerable households, micro-enterprises and transport users particularly affected by the inclusion of greenhouse gas emissions from buildings and road transport within the scope of Directive 2003/87/EC (see summary);
finance temporary direct income support for vulnerable households and transport users.

KEY POINTS

Vulnerable households, micro-enterprises and transport users

Directive 2003/87/EC sets up a system for greenhouse gas emission allowance trading to promote emission reductions, including from buildings and road transport. Three target groups of the Social Climate Fund are identified by Regulation (EU) 2023/955 as being significantly affected by the cost impact of the new emission trading for buildings and road transport:

vulnerable households are defined as those experiencing energy poverty, including those on low and lower-middle incomes, and which lack the means to renovate the building they occupy;
vulnerable micro-enterprises are those which do not have the means to renovate the building they occupy, purchase zero- and low-emission vehicles or switch to alternative sustainable modes of transport, including public transport;
vulnerable transport users are defined as individuals and households experiencing transport poverty, including those on low and lower-middle incomes, and who do not have the means to purchase zero- and low-emission vehicles or to switch to alternative sustainable modes of transport, including public transport.

Social climate plans

Each Member State should submit a social climate plan to the European Commission after consulting local and regional authorities, economic and social partners and civil society. The plans should cover measures and investments to address the impact of carbon pricing for the building and road transport sectors on vulnerable households, micro-enterprises and transport users in order to ensure affordable heating, cooling and mobility.

Eligible measures and investments

The plans may include supporting the following measures and investments to be designed for lasting impact:

building renovation, in particular for vulnerable households and micro-enterprises occupying the worst-performing buildings, including for tenants and people living in social housing;
access to affordable energy-efficient housing, including social housing;
building decarbonisation, such as electrification of heating, cooling and cooking, through access to affordable and energy-efficient systems;
integrating renewable energy generation and storage, including through renewable energy communities, citizen energy communities and other active customers to promote self-consumption of renewable energy;
targeted information, education, awareness and advice on cost-effective measures and investments, available support for building renovations and energy efficiency and sustainable and affordable mobility and transport alternatives;
access to zero- and low-emission vehicles and bicycles, including financial support or tax incentives;
public and private infrastructure, including purchase of zero- and low-emission vehicles, recharging and refuelling infrastructure and development of a second-hand zero-emission-vehicles market;
incentives to use affordable and accessible public transport;
private and public entities developing and providing sustainable mobility on demand, shared mobility services and active mobility options.

Member States may include in their plans direct income support for vulnerable households and transport users to reduce the impact of the increase in road transport and heating fuel prices. Such direct support must:

be temporary and decrease over time;
represent no more than 37.5% of the estimated total costs of the plan.

Financing

A maximum of €65 billion from 1 January 2026 to 31 December 2032 is allocated to the fund. In addition, Member States must contribute at least 25% of the estimated total costs of their plans.

Member States may request transfers to the fund from the cohesion policy programmes under shared management established by Regulation (EU) 2021/1060. The Member States may also transfer up to 15% of their allocation from the fund to the cohesion policy programmes.

Information

Those receiving support from the fund should be informed on where the funds originate, including where they benefit from these funds through intermediaries. Information should include the EU emblem and the words ‘funded by the European Union – Social Climate Fund’.

Transparency

The Commission should forward the plans submitted by Member States, and the decisions, simultaneously and on equal terms to the European Parliament and the Council of the European Union without undue delay.

FROM WHEN DOES THE REGULATION APPLY?

It applies from 30 June 2024.

BACKGROUND

The regulation amends Article 26 (transfer of resources) of Regulation (EU) 2021/1060 – common rules on EU funds (2021–2027).

For further information, see:

Fit for 55 (European Council – Council of the European Union)
Social Climate Fund (European Commission)
Questions and answers – Emissions trading – Putting a price on carbon (European Commission).

MAIN DOCUMENT

Regulation (EU) 2023/955 of the European Parliament and of the Council of 10 May 2023 establishing a Social Climate Fund and amending Regulation (EU) 2021/1060 (OJ L 130, 16.5.2023, pp. 1–51).

RELATED DOCUMENTS

Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC (OJ L 275, 25.10.2003, pp. 32–46).

Successive corrections to Directive 2003/87/EC have been incorporated into the original text. This consolidated version is of documentary value only.

Directive (EU) 2023/1791 of the European Parliament and of the Council of 13 September 2023 on energy efficiency and amending Regulation (EU) 2023/955 (recast) (OJ L 231, 20.9.2023, pp. 1–111).

Regulation (EU) 2021/1056 of the European Parliament and of the Council of 24 June 2021 establishing the Just Transition Fund (OJ L 231, 30.6.2021, pp. 1–20).

See consolidated version.

Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy (OJ L 231, 30.6.2021, pp. 159–706).

See consolidated version.

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – The European Pillar of Social Rights Action Plan (COM(2021) 102 final, 4.3.2021).

Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, pp. 17–75).

See consolidated version.

Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget (OJ L 433 I, 22.12.2020, pp. 1–10).

See consolidated version.

Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions – The European Green Deal (COM(2019) 640 final, 11.12.2019).

Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament and of the Council (OJ L 328, 21.12.2018, pp. 1–77).

See consolidated version.

Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (recast) (OJ L 328, 21.12.2018, pp. 82–209).

See consolidated version.

Council Decision (EU) 2016/1841 of 5 October 2016 on the conclusion, on behalf of the European Union, of the Paris Agreement adopted under the United Nations Framework Convention on Climate Change (OJ L 282, 19.10.2016, pp. 1–3).

Paris Agreement (OJ L 282, 19.10.2016, pp. 4–18).

Directive 2010/31/EU of the European Parliament and of the Council of 19 May 2010 on the energy performance of buildings (recast) (OJ L 153, 18.6.2010, pp. 13–35).

See consolidated version.

last update 11.12.2023