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Greece and ETS2: What it means for households and how to protect the most vulnerable
Jul 14, 2025

Spending by vulnerable households in Greece is expected to increase by up to EUR 1.6 billion between 2027 and 2032 due to the implementation of the new Emissions Trading System (ETS2) for buildings and road transport. A new study by The Green Tank and Facets recommends a mix of immediate and long-term measures, costing up to EUR 15.5 billion, leveraging the Social Climate Fund (SCF) and other available resources to protect vulnerable households while also contributing to climate targets.

The Emissions Trading System 2 (ETS2) will introduce carbon pricing in the buildings and road transport sectors starting in 2027. Its implementation is expected to drive up energy and transport costs for households that rely on fossil fuels, with the greatest impact falling on the most vulnerable social groups.

This is a critical moment, as EU-27 Member States are currently drafting their national Social Climate Plans for the period 2026–2032. These plans will lay out how each country intends to address these challenges by making use of available funds and further advancing the path toward climate neutrality.

The study by The Green Tank and Facets, titled Recommendations for policies and measures to mitigate ETS2 implementation impacts in Greece,” aims to inform this process by assessing the socio-economic impacts of ETS2 on Greek households and proposing targeted measures to mitigate them. The main findings are summarized below:

  1. Greek households are already facing significant difficulties even before the start of the new carbon pricing system: 26.5% of the population was found to be energy vulnerable, and 13.9% transport vulnerable.
  2. The new system is expected to increase spending by vulnerable households by between EUR 833 million and EUR 1.6 billion over 2027–2032, further expanding the number of vulnerable households by about 0.9%–1.5% for energy vulnerability and 1.1%–2.1% for transport vulnerability.
  3. To provide immediate relief, the study proposes direct income support totaling EUR 742 million to EUR 1.42 billion (15.5%–29.7% of the SCF, well below the 37.5% ceiling set by the Regulation).
  4. For long-term solutions to energy vulnerability, measures such as social housing, shallow or deep renovations, heat pumps, and solar PV systems (individual or through energy communities) targeting specific subpopulations are expected to benefit 276,000–348,000 households, at an estimated total cost of EUR 6.8–8.4 billion for 2027–2032.
  5. Similarly, in road transport, subsidizing electric vehicle leasing in regional areas and providing discounts on public transport in major cities are expected to cost EUR 1.18–1.28 billion and ease transport vulnerability for 262,000–282,000 households. Given the potential to draw on other resources beyond the SCF, the study also proposes allocating an additional EUR 3.2–4.3 billion to upgrade transport infrastructure (public transport, rail, buses).
  6. The total cost of these investments, including direct payments—EUR 11.9–15.5 billion—can be covered by fully utilizing the SCF (EUR 4.78 billion), the additional revenues from auctioning ETS2 allowances (EUR 2.75–6.34 billion), and part of the revenues from auctioning ETS1 allowances (EUR 4.33 billion).

The study shows that implementing ETS2 can be a significant opportunity to both tackle the widespread phenomenon of energy and transport vulnerability in Greece and reduce the carbon footprint of buildings and road transport. The key is to leverage funding sources beyond just the Social Climate Fund,” said Ioanna Souka, energy policy analyst at The Green Tank.

Beyond the immediate financial support for vulnerable households, which will only temporarily cushion the impacts of ETS2, truly addressing energy and transport vulnerability requires targeted structural measures—such as home renovations, replacing oil burners with heat pumps, installing solar PV, promoting e-mobility, and improving public transport,” said Professor Dimitris Lalas of Facets.

Notes for editors:

  • You can read the full study “Recommendations for policies and measures to mitigate ETS2 implementation impacts in Greece” here.
  • The study was conducted within the framework of the LIFE Effect project (LIFE23 GIC BE LIFE EFFECT), which aims to strengthen the knowledge, capacity, and networking of civil society and other stakeholders on two new EU climate policy tools: the EU Emissions Trading System for road transport and buildings (ETS2) and the Social Climate Fund.
  • To identify vulnerable populations, the study used detailed data from the Household Budget Survey (HBS), kindly provided by ELSTAT.
  • Greece’s Social Climate Plan is open for public consultation from 5–18 July 2025 at: https://www.opengov.gr/home/2025/07/04/9939.
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