Safeguarding social justice in EU climate finance

What the new EU budget proposal means for the Social Climate Fund?

In July 2025, the European Commission presented its proposal for the next long‑term EU budget (MFF 2028–2034). The proposal introduces a major shift: several previously separate EU funding instruments, including cohesion funds, agricultural spending and programmes related to migration, would be merged into a single, centralised fund, the National and Regional Partnership Plan Fund (NRPP Fund). This new fund is intended to become the EU’s main financial vehicle for climate action and a just transition. The Social Climate Fund (SCF), designed to cushion the social impacts of the new emissions trading system for buildings and transport (ETS2), would also be integrated into the NRPPs.

Our policy brief examines what this restructuring means for the Social Climate Fund. The increased flexibility of the NRPP Fund could weaken core principles of the SCF – including the clear earmarking of resources for vulnerable households and the incentives for Member States to submit their national Social Climate Plans on time.

To address these risks, the publication sets out concrete recommendations to ensure that the NRPP regulation remains aligned with the requirements of the Social Climate Fund – and that the European Commission’s promise is upheld: no one should be left behind on the path to climate neutrality.