Why €72bn is not enough to meet the ambition of the Social Climate Fund

The budget for the Social Climate Fund – which aims to support European citizens through the energy transition – should be doubled.

Releasing the ‘Fit for 55’ package in July last year, the European Commission announced that it would launch the Fund in 2025 to help citizens finance investments in energy efficiency, new heating and cooling systems, and cleaner mobility. A particular focus of the Fund will be to shield the most vulnerable households, micro-enterprises, and transport users from the social and distributional effects of new carbon pricing systems.  

While Eurelectric has welcomed the Fund, it has also called for a “bigger financial envelope”. Additional resources will be needed to support those vulnerable to price hikes, and to reduce the vulnerability in the medium and long term by helping with the initial cost of switching to clean electric-based solutions for their homes and transport.

In a series of amendment proposals published this week, Eurelectric urged the Commission to double the level of financial support from €72.2 billion to €144.4 billion over the seven-year funding period.

To address this shortfall, our association suggested, a higher amount could be earmarked from the new ETS for buildings and transport.

In any event, the top-up from Member States should not come from additional taxes or levies from the power sector or electricity bills. Neither should funds be diverted from other programmes within the Multiannual Financial Framework (MFF) supporting electrification and decarbonisation projects, or the cohesion policies.

Another amendment included a recommendation to the Commission to provide clarity to Member States on how to best articulate the funding. Support will be channelled either by lump sums or by promoting among others, electrification, energy efficiency and decarbonisation projects.

The power sector stands ready to share its expertise to support national and local authorities to develop plans for switching to electric-based solutions.

Check our Fit for 55 webpage for an overview of our positions.