News | 17 April 2023

Joint Statement: Why adopting the Social Climate Fund is the right choice for the EU

Blick in den Plenarsaal des EU-Parlaments in Strasbourg

Plenary hall of the EU Parliament in Strasbourg.

Today the European Parliament will vote on the reform of the Emissions Trading System (ETS) and the new Social Climate Fund (SCF). The EU plans to introduce a new ETS for road transport and heat in 2027. To ensure that the resulting carbon price is socially acceptable, it is also launching the SCF. Now that the Parliament, Member States and the European Commission have informally agreed on a compromise in December, approval is expected.

Starting in 2026, the Fund should channel in total 86 billion euros to households in need. It is the first EU fund specifically dedicated to provide financial support to vulnerable households, transport users, and micro-enterprises in the transition towards sustainable mobility and energy consumption in buildings. Its adoption represents a milestone towards a more systematic integration of a social dimension into EU climate policies, even as some weak points remain.

European NGOs, including Germanwatch, have published a joint statement emphasising the importance of the new fund to ensure social justice. However, Germanwatch and the other signatories call for a substantial increase in funding to ensure that European climate action is fair and just.