At the April plenary session in the European Parliament, we approved with 521 votes in favour the agreement on the Social Climate Fund made between the three European institutions in December 2022. The report was jointly dealt with by the Parliament’s Committee on Environment, Public Health and Food Safety and the Committee on Employment and Social Affairs and was adopted on 18 May 2022. Ahead of the tripartite negotiations, Parliament adopted its position at the plenary session in June 2022.
The Social Climate Fund is the cornerstone for ensuring social justice in Europe’s transition to climate neutrality. It is part of the “Fit for 55” legislative package, which is the roadmap for achieving the European Green Deal target of reducing greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels, a target made legally binding by the European Climate Law. This Fund is linked to the Commission’s proposal to extend the EU Emissions Trading Scheme (ETS) to the buildings and road transport sectors. Hence, the Fund intends to benefit vulnerable households, micro-enterprises and transport users who will be particularly affected by the potential increase in energy and heating fuel costs.
At the European Parliament, we have made great efforts to ensure that the Social Climate Fund has the necessary tools to effectively tackle the impact of the transition to decarbonisation in a way that does not negatively affect the most vulnerable European citizens. In this line, major achievements were made during the negotiations which are reflected in the agreement approved in trilogues.
Firstly, temporary direct income support is established, which will not represent more than 37.5% of the total estimated cost of the national plans. The Fund will also finance structural investments with a lasting impact, including: renovation of buildings, especially for people living in the lowest performing buildings, including those living in social housing; support for access to affordable and energy efficient housing, including social housing; decarbonisation of buildings; integration of renewable energies; purchase of zero and low emission vehicles and investment in the necessary infrastructure for these; incentivising the use of affordable and accessible public transport; and support for shared transport services and active mobility options.
Moreover, thanks to the frontloading proposed by the Parliament, the Fund will start to be operational one year before (2026) the entry of the EU Emissions Trading Scheme (ETS) for the buildings and road transport sectors. In addition, if energy prices are exceptionally high, the entry of the ETS could be delayed by one year, starting in 2028. The Fund will be operational until 2032. The financing of the Fund would come from future ETS revenues, with a budget amounting to €65 billion, which could go up to €86.7 billion as Member States will co-finance 25% of it.
The Parliament has achieved the inclusion of the definitions of energy and transport poverty in the text, which ensures legal certainty for the Fund and a coherent approach to poverty related to the green transition. In addition, Member States will have to explain how they will apply these definitions in their national climate plans. It has also been successfully included that measures and investments supported by the Fund will contribute, where appropriate, to the implementation of the European Pillar of Social Rights, as well as to the creation of sustainable and quality jobs in the areas covered by the Fund’s measures and investments.
In addition, the inclusion of an article on Social Dialogue on Climate has been achieved. This initiative means that, in order to ensure greater transparency and accountability between the institutions, Parliament will be able to invite the Commission twice a year to present the plans proposed by the Member States, the Commission’s assessment of the Member States’ plans, as well as the extent to which the milestones and targets of the plans submitted by the Member States have been achieved.
As we Socialists have argued from the beginning, it is imperative that the transition to climate neutrality is socially just. For this reason, I welcome the approval of the Social Climate Fund, a big step in the right direction that shows that the EU’s commitment to fighting climate change goes hand in hand with the commitment to help the most vulnerable citizens through this transition.