Social Climate Plans to Cushion Social Impacts of Climate Action
von Susanne Reiff, GIZ/EUKI
The EU Social Climate Fund (SCF) aims to mitigate the social impacts of the green transition on vulnerable groups such as low-income households. To access SCF funding, Member States must submit national Social Climate Plans by June 2025, outlining their planned measures and investments.
Energy-poor households, transport users and micro-enterprises in the European Union are particularly affected by the costs of the green transition. Improving the energy efficiency of buildings or switching to renewable energies often exceeds the financial capacities of households or enterprises. Zero or low-emission mobility is not yet available, accessible or affordable for everyone.
That’s why the EU has set up the 65-billion-euro Social Climate Fund with a focus on enabling a just transition to climate neutrality in the housing and mobility sectors. The Fund will cover the period from 2026 to 2032 and pool revenues from the auctioning of allowances from the EU’s new Emissions Trading System (ETS2).
To access the Fund, Member States will have to submit national Social Climate Plans, which must include measures on energy efficiency, building renovations, zero- or low-emission mobility and transport, the reduction of greenhouse gas emissions and a decrease in the number of vulnerable households, micro-enterprises and transport users. Temporarily, they can also use the Fund to provide targeted direct income support to vulnerable households and transport users, as long as structural measures are still being developed or have yet to take effect.
Needs-driven country-specific measures
In its Guidance on the Social Climate Plans, published on 5 March 2025, the European Commission encourages Member States “to prioritise measures and investments that have the most significant impact on the target groups while striking a balance between the policy areas covered in the SCP, […] in line with the specific effects of the ETS2 in their country’s context”.
To help Member States to develop impactful and cost-effective measures and investments, the Commission has collected some inspiring examples, including Italy’s Energy Income Scheme, which provides non-repayable grants to low-income households for the installation of domestic photovoltaic systems, and a Dutch subsidies programme aimed at companies, micro-enterprises and non-profit organisations wishing to purchase or lease zero-emission commercial vehicles.
Nationwide consultations as a basis
The Social Climate Plans are based on public consultations with key stakeholders, including local and regional authorities, civil society, economic and social partners, youth organisations and the research community. This broad participatory approach is intended to ensure that all measures and investments genuinely address the needs of the vulnerable target groups. Stakeholders can provide data on specific needs, propose measures or give feedback on draft plans and actions. There are already many example of good practices of public consultation for the Social Climate Plans, including an intensive media campaign on the consultation process in Poland and strategies in Estonia to bring “hidden viewpoints” to the fore.
The Commission’s next step is to assess the plans, starting in July 2025. It has emphasised that payments to Member States will only be disbursed when the milestones and targets set out in the plans are achieved.
On Thursday, March 13, the EUKI Academy hosted a web seminar on this topic. You can watch the recording here.