Members' Research Service By / November 10, 2021

Social climate fund: Fit for 55 package [EU Legislation in Progress][Policy Podcast]

On 14 July 2021, the European Commission adopted a legislative proposal to create a new social climate fund (SCF), alongside a broader overhaul of existing EU climate and energy legislation referred to as the ‘fit for 55’ package.

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Written by Alex Wilson (1st edition).

On 14 July 2021 the European Commission adopted the ‘fit for 55’ package, a set of legislative proposals to meet the new EU objective of a minimum 55 % reduction in greenhouse gas (GHG) emissions by 2030. The fit for 55 package is part of the Commission’s European Green Deal, which aims to set the EU firmly on the path towards net zero GHG emissions (climate neutrality) by 2050.

The fit for 55 package includes a regulation establishing a new social climate fund (SCF). The aim of the SCF is to help vulnerable households, micro-businesses and transport users meet the costs of the green energy transition in the buildings and road transport sector. The SCF is designed to counter the additional costs that vulnerable consumers may face when the EU Emissions Trading System (ETS) Directive is revised to cover these two sectors, as proposed in the fit for 55 package.

The SCF aims to provide over €72 billion in EU funding over the 2025-2032 period, to be paid for mainly by ETS credits in the buildings and road transport sectors. The SCF funds will need to be matched by equivalent social climate funding from Member States, which must prepare social climate plans. As a new budget line to be financed from EU ‘own resources’, the SCF will require amendments to the Own Resources Decision and the 2021-2027 multiannual financial framework. The file has been referred to the Committee on Environment, Public Health and Food Safety (ENVI), where the rapporteur is preparing a draft report.


Proposal for a Regulation of the European Parliament and of the Council establishing a Social Climate Fund
Committee responsible:Environment, Public Health and Food Safety (ENVI)COM(2021) 568
Rapporteur:Esther De Lange (EPP, the Netherlands)2021/0206(COD)
Shadow rapporteurs:Petar Vitanov (S&D, Bulgaria)
Ondřej Knotek (Renew, Czechia)
Sara Matthieu (Greens/EFA, Belgium)
Joëlle Mélin (ID, France)
Andrey Slabakov (ECR, Bulgaria)
Petros Kokkalis (The Left, Greece)
Ordinary legislative procedure (COD)
(Parliament and Council on equal footing – formerly ‘co-decision’)
Next steps expected: Publication of draft report

Listen to policy podcast ‘Social climate fund: Fit for 55 package on YouTube.

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