Regulation (EU) 2023/955 establishing a Social Climate Fund and amending Regulation (EU) 2021/1060

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Series Details L 130, Pages 1-51
Publication Date 16/05/2023
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Regulation (EU) 2023/955 - adopted by the co-legislators on 10 May 2023 - establishing a Social Climate Fund and introducing amendments to Regulation (EU) 2021/1060.

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The Communication setting out the European Green Deal from December 2019 introduced a new growth strategy for the European Union (EU). It reaffirmed the European Commission's ambition to increase its climate targets and achieve climate neutrality by 2050. These targets were further updated in September 2020 in the Climate Target Plan, which became legally binding with the European Climate Law. The Fit for 55 legislative package was the result of the review carried out by the Commission on the EU's climate and energy legislation in view of the targets adopted in the meantime.

The increased climate ambition also means the contribution from all sectors need to be increased. For that purpose, emissions trading for buildings and road transport was proposed as part of the revision of the ETS Directive. In the short-term the increase in price for fossil fuels will have a disproportionate impact on vulnerable households, vulnerable micro-enterprises and vulnerable transport users who spend a larger part of their incomes on energy and transport and who, in certain regions, do not have access to alternative, affordable mobility and transport solutions.

This Regulation establishes a Social Climate Fund for the period between 2026 and 2032. It seeks to provide financial support to Member States for the measures and investment included in their Social Climate Plans. These measures and investments should benefit households, micro-enterprises and transport users, which are vulnerable and particularly affected by the inclusion of greenhouse gas (GHG) emissions from buildings and road transport.

The draft law was adopted by the European Commission on 14 July 2021, as part of the Fit for 55 legislative package. The plenary of the European Parliament endorsed a negotiating position on 22 June 2022. The Council of the European Union adopted its general approach to the proposal on 29 June. An informal agreement between the co-legislators on a compromise text for this file was reached on 18 December. This was formally endorsed by the Parliament on 18 April 2023 and by the Council on . The Act was signed by the co-legislators on 10 May 2023 and published in the Official Journal on 16 May 2023.

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Commentary and Analysis
Social Europe, 19/07/2021: Is Europe socially fit for the ‘Fit for 55’ package?
Jacques Delors Institute (Notre Europe): Brief, 06/10/2021: A Social Climate Fund for a fair energy transition
European Trade Union Confederation (ETUC): ETUC position on the creation of a second ETS on road transport and building and of a new Social Climate Fund (9 December 2021)
European Consumer Organisation (BEUC): Position Paper, 24/01/2022: Well-funded, well-designed and well-disbursed: How to develop a Social Climate Fund that works for people
European Public Service Union (EPSU), 18/05/2022: EPSU reaction to the compromise in Parliament on EU ETS 2 and Social Climate Fund
European Parliamentary Research Service (EPRS): At a Glance, 01/06/2022: Social climate fund
Institute for Applied Ecology (Oeko-Institut): Publications, June 2022: The Social Climate Fund – Opportunities and Challenges for the buildings sector
London School of Economics (LSE): EUROPP Blog, 06/06/2022: A social approach to climate change: Explaining the adoption of the Just Transition Fund
European Parliamentary Research Service (EPRS): Briefing, 15/06/2022: Social climate fund: Fit for 55 package
Stockholm Environment Institute (SEI): Policy Paper, 21/06/2022: The impact of the EU Emissions Trading System on households: how can the Social Climate Fund support a just transition?
E3G: Letters, 11/10/2022: The urgency of a bold and transformative EU Social Climate Fund
Reuters: Explainers, 22/12/2022: Can Europe's new Social Climate Fund protect poor from rising carbon cost?
Carnegie Europe: Article, 02/02/2023: Climate Action, Social Justice, and Democracy: Europe’s New Trilemma
European Trade Union Institute (ETUI): News, 20/02/2023: Social Climate Fund: A giant with feet of clay?
European Parliamentary Research Service (EPRS): At a Glance, 12/04/2023: Social climate fund

EurActiv: Topics: Social Climate Fund
TVP World, 02/08/2021: Poland to benefit significantly from Social Climate Fund: EC head
EUObserver, 11/02/2022: Tensions foreseen over push to link climate funds to rule of law
Associated Press (AP News), 18/12/2022: EU reaches deal on emissions trading, social climate fund
Politico, 27/12/2022: EU grapples with protecting the poor from higher heating and transport costs

EUR-LEX: COM(2021)568: Proposal for a Regulation establishing a Social Climate Fund
European Parliament: Legislative Observatory: Procedure File for Proposal on Social Climate Fund (2021/0206(COD))
European Parliament: Legislative Train Schedule: Social Climate Fund
European Commission: Climate Action: Social Climate Fund
European Commission: Press Release, 14/07/2021: European Green Deal: Commission proposes transformation of EU economy and society to meet climate ambitions
European Parliament: Press Release, 18/05/2022: Social Climate Fund to help those most affected by energy and mobility poverty
European Parliament: Press Release, 22/06/2022: Fit for 55: Social Climate Fund to combat energy and mobility poverty
Council of the European Union: Press Release, 29/06/2022: Fit for 55 package: Council reaches general approaches relating to emissions reductions and their social impacts
Council of the European Union: Press Release, 18/12/2022: 'Fit for 55': Council and Parliament reach provisional deal on EU emissions trading system and the Social Climate Fund
European Parliament: Press Release, 18/12/2022: Deal on establishing the Social Climate Fund to support the energy transition
Renew Europe EP Group: News, 18/12/2022: Social Climate Fund will ensure the climate and energy transition leaves no one behind
German Federal Ministry for Economic Affairs and Climate Action: Press Release, 18/12/2022: New EU climate policy in place: political agreement in finalising the Fit for 55 climate package
S&D EP Group: Newsroom, 17/04/2023: S&Ds: Strong Social Climate Fund needed to support vulnerable citizens in the transition to climate neutrality

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