The deadline for National Social Climate Plans (NSCPs) has now passed, and the majority of EU governments have not submitted their plans on time to the European Commission detailing how they will support those most vulnerable to the effects of the carbon pricing of road transport and buildings (ETS2).

With some countries only beginning public participation in June (and others not having started at all), NGOs are concerned that measures outlined in NSCPs will be insufficient to protect those most vulnerable to ETS2 prices. National governments must prioritise completing their plans as soon as possible, but not at the expense of meaningful stakeholder engagement. 

When reviewing the plans, NGOs encourage the Commission to engage with civil society in countries where public participation has been limited. The Commission should not accept plans established with insufficient participation, and require governments redraft incomplete NSCPs. The assessment process must be transparent, with relevant information publicly available, so that stakeholders can engage in meaningful advocacy with decision-makers.   

While the €86 billion of the Social Climate Fund cannot address the root causes of energy or transport poverty across the EU, it can (if spent wisely) go a long way to protecting those most vulnerable to the price increases in 2027. Member states should increase the co-financing rate of their social climate plans, beyond the mandatory 25% and commit to dedicating all ETS2 revenue to socially targeted investments in buildings and road transport, and direct payments to protect people’s income as energy prices rise. Member states must also prioritise transposing the ETS2 Directive into national law so that they can receive their SCF allocation and wider ETS2 revenues from 2027. Luke Haywood, Head of Climate and Energy, European Environmental Bureau (EEB), said: 

“Emphasis on long-term support measures in NSCPs will be insufficient to mitigate the impact of the carbon price once ETS2 begins in 2027. Large emitting countries such as Germany and France have a particular responsibility to adopt additional measures to reduce fossil fuel use in buildings and transport. Without additional measures, fuel prices will rise significantly across the EU.”

Eleanor Scott, EU Carbon Market Expert, Carbon Market Watch. 

“Strong social climate plans are a key ingredient to the success of ETS2, but member states should go further. All ETS2 revenue must be spent on climate action according to EU law. This is a €296 billion opportunity to provide socially targeted investment to decarbonise buildings and road transport, and dedicate support to lower income groups. By pricing pollution and providing affordable clean alternatives through ETS2 revenue and the SCF we can finally break our dependence on expensive fossil fuels.”

Notes:

• Energy-poor households are defined by the EU Joint Research Centre as those unable to keep their homes adequately warm or struggling to pay energy bills on time.
• The Emissions Trading System (ETS2) introduces a carbon price on fuels used in buildings and road transport from 2027. Revenues will be returned to Member States for national climate and energy spending.
• The Social Climate Fund (SCF) is a new EU financial mechanism designed to cushion the social impacts of carbon pricing in the buildings and transport sectors.
• See our recommendations for NSCP measures here and here
• ETS2 revenue is estimated at €296 billion between 2027-2032 at a price per tonne of CO2 at €55