What is the Social Climate Fund?
The European Union’s Social Climate Fund (SCF) is a financial instrument dedicated to helping EU Member States address the challenges of climate change and its impacts on people, communities and the environment. The fund was established in 2018 with the goal of providing support for projects that support adaptation to climate change, mitigation of its impacts and the promotion of sustainable development.
The Social Climate Fund is part of the EU’s broader strategy for a sustainable and resilient Europe. This strategy is based on the principles of a green economy, which means that projects funded by the SCF must foster sustainable economic growth and address the impacts of climate change on people and the environment. This means that the fund is designed to support activities that protect natural resources, improve access to clean energy and reduce greenhouse gas emissions.
How does it work?
The Social Climate Fund provides grants to Member States and other partners to cover up to 80% of the costs of climate change adaptation and mitigation projects. The fund can be used to fund a wide range of activities, including research, training, capacity building and awareness raising. It can also be used to fund projects that seek to improve the resilience of communities, businesses and infrastructure to the impacts of climate change.
The SCF is a long-term investment that seeks to help Member States tackle the challenges of climate change and its impacts. It is designed to support activities that are both cost-effective and have the potential to have a long-term positive impact on people and the environment. The fund is open to all Member States, as well as other partners such as international organizations, local authorities, non-governmental organizations and the private sector.
What is its impact on our lives on a personal level?
The fund provides an opportunity for all Member States to take action to address climate change and its impacts, while also creating economic opportunities and promoting social justice for its individuals and businesses.
The Council and the European Parliament reached a provisional deal on the new fund in December 2022, so with a budget of €65 billion they can help at least 34 million people who might be considered ‘energy poor’, i.e. vulnerable household, micro businesses and transport users.
Practically the Member States can help with insulation vouchers or moving towards greener transport options, ensuring that the climate transition will be fairer and more socially inclusive.
When will it kick off?
SCF will start in 2026, one year before the Emissions Trading System (ETS) is extended to cover buildings and road transport (the so-called “ETS II”). If energy prices are exceptionally high, the ETS extension may be postponed by one year.
