Briefing Paper 102 – Social Climate Fund

In 2019, it was estimated that over 50 million Europeans live in energy poverty and struggle to keep their homes adequately warm or cool, pay their utility bills on time and live in healthy spaces. As a result of the economic hardships caused by the Covid-19 pandemic, the rising inflation and the current oil and gas crisis, which was recently exacerbated by uncertainties over the EU’s future energy supplies due to the war in Ukraine, the number of Europeans living in energy poverty has grown exponentially and socioeconomic inequalities have worsened.

In mid-2021, as part of the first Fit for 55 package under the European Green Deal, the European Commission proposed the creation of the Social Climate Fund to cushion the social costs of the clean energy transition. This initiative marks an evolution in the Commission’s view of a “Just Transition”: from “leaving no one behind” in the regions and sectors that depend on fossil fuels or carbon-intensive processes, mainly through the Just Transition Mechanism and Fund, to helping those suffering from energy poverty all across Europe.

This briefing paper sets out the main features of the Commission’s proposal for a Social Climate Fund and provides SOLIDAR’s recommendations on the scope and governance of this new, hopefully soon-to-be-born funding source.