The Social Climate Fund (SCF) is the first dedicated EU Fund providing financial support to vulnerable households, transport users and micro-enterprises in the sustainable energy transition. Almost two years after the European Commission published its proposal for the Fund’s establishment, the SCF regulation entered into force on 5 June. While it is not the “cornerstone for a just transition”[i] that energy communities across Europe envisioned, it holds potential to boost citizen empowerment, especially – and critically – for the most vulnerable

The establishment of the SCF is part of the EU ambition to become ‘Fit for 55’. The Fit for 55 legislative package aims to align EU targets and policies with the long term objective of a climate neutral Europe by 2050, and the intermediate target of 55% greenhouse gas emission reductions by 2030. This, in turn, fits under the umbrella of the European Green Deal, the EU roadmap towards a just climate and energy transition.

Communities and organisations across Europe applauded the creation of a dedicated fund to support the Green Deal’s mission to ‘leave no one behind’.[ii] The initiative held real potential for policymakers to create  a tool that would fill the existing gap for financing structural solutions to tackle the root causes of energy poverty.  Two years of negotiations have, unfortunately, not lead to this result. As the SCF is mainly fed by the extension of the EU Emissions Trading System to buildings and transport, the road towards addressing the distributional impacts of the energy and climate transition in a proactive manner remains long.

Nevertheless, there are some wins. Inclusive governance over the Fund got more pronounced and bottom-up citizen-led approaches, such as energy communities, are specifically recognised as a way to achieve the objectives of the SCF regulation. This means energy communities can use the Fund to address energy poverty and empower people in vulnerable situations to claim their rights to become active participants in the energy system.

To mobilise this Fund, Member States will need to submit Social Climate Plans by 30 June 2025. These will need to be prepared in close consultation with a diverse set of stakeholders, ensuring inclusive governance over the Fund. It is paramount that these plans are geared towards supporting structural and empowering measures towards energy and climate justice. They should serve the most vulnerable to ensure the distribution of costs and benefits is as fair and equitable as possible.

Later this year, CEES will publish a set of recommendations at both the EU and Member State level to enable energy communities’ activities against energy poverty. Stay tuned!


[ii] See for example: European Alliance for a Just Transition (2022, March). Joint Statement on the Social Climate Fund.

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The CEES project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No. 101026972.