{"id":74738,"date":"2025-09-03T12:44:52","date_gmt":"2025-09-03T11:44:52","guid":{"rendered":"https:\/\/www.climatechangenews.com\/?p=74738"},"modified":"2025-10-14T14:35:12","modified_gmt":"2025-10-14T13:35:12","slug":"without-robust-action-new-eu-carbon-pricing-plan-risks-leaving-vulnerable-people-behind","status":"publish","type":"post","link":"https:\/\/www.climatechangenews.com\/2025\/09\/03\/without-robust-action-new-eu-carbon-pricing-plan-risks-leaving-vulnerable-people-behind\/","title":{"rendered":"Without robust action, new EU carbon pricing plan could leave vulnerable people behind"},"content":{"rendered":"\n<p><em>Maris Pedaja is a Just Transition Policy Officer at CEE Bankwatch Network.<\/em><\/p>\n\n\n\n<p><strong>As the European Union accelerates its path towards climate neutrality, 2025 marks a critical juncture for one of its most socially sensitive climate policies \u2013 the EU Emissions Trading System for buildings and road transport (known as ETS2). Without quick action from member states, this new climate policy could have regressive social impacts.<\/strong><\/p>\n\n\n\n<p>Set to launch in 2027, ETS2 will put a price on carbon emissions from household heating and road transport, resulting in inevitable price increases in those two sectors. To help mitigate its impact on the most vulnerable households, transport users and micro-enterprises, 25% of the ETS2 revenues will flow into a Social Climate Fund (SCF).<\/p><div class=\"clima-in-post\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"clima-1298383415\"><div style=\"text-align:center; margin: 20px 0;\">\r\n  <div style=\"display: flex; align-items: center; justify-content: center; margin-bottom: 8px;\">\r\n    <hr style=\"flex: 1; max-width: 80px; border: none; border-top: 1px solid #ccc; margin: 0 10px;\">\r\n    <span style=\"font-family: Open Sans, sans-serif; font-size: 12px; color: #BFBFBF; text-transform: uppercase; letter-spacing: 1px;\">Advertisement<\/span>\r\n    <hr style=\"flex: 1; max-width: 80px; border: none; border-top: 1px solid #ccc; margin: 0 10px;\">\r\n  <\/div>\r\n\r\n  <div id=\"chn-in-post\"><\/div>\r\n<\/div>\r\n<script defer src=\"https:\/\/ead.newint.org\/show.php?zones=chn-in-post\"><\/script>\r\n<\/div>\n\n\n\n<p>The SCF can be viewed as Europe\u2019s financial safety net for the most vulnerable people, designed to ensure that, as Europe pushes fossil fuels out of homes, cars and cities, it doesn\u2019t push people into poverty. Therefore, ETS2 and the SCF are two sides of the same coin: while ETS2 imposes a necessary climate cost on carbon-intensive activities, the Social Climate Fund is meant to make that transition affordable and just.<\/p>\n\n\n<div class=\"chn-block post-slider uk-background-primary uk-padding-remove-vertical\"><div  class=\"\" uk-slider=\"autoplay\"><ul class=\"uk-slider-items post-list uk-grid uk-grid-large uk-child-width-1-2@s \"><li class=\"uk-slide 74647\">\n\n    <article id=\"post-74647\" class=\"post-74647 post type-post status-publish format-standard has-post-thumbnail hentry category-sponsored tag-just-transition membership_period-forever-free\">\n\n        <header class=\"post__header\">\n\n            <div class=\"header-visual\">\n\n                <a href=\"https:\/\/www.climatechangenews.com\/2025\/09\/02\/support-grows-for-cop30-just-transition-talks-to-address-critical-minerals\/\" rel=\"bookmark\" target=\"_blank\">\n                <figure class=\"post__image small pos-\">\n                    <img loading=\"lazy\" decoding=\"async\" width=\"480\" height=\"320\" src=\"https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/07\/Broken-lithium--480x320.jpg\" class=\"attachment-small size-small wp-post-image\" alt=\"\" srcset=\"https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/07\/Broken-lithium--480x320.jpg 480w, https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/07\/Broken-lithium--960x641.jpg 960w, https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/07\/Broken-lithium--1440x961.jpg 1440w\" sizes=\"auto, (max-width: 480px) 100vw, 480px\" \/>                <\/figure>\n\n\n                <\/a>\n\n            <\/div>\n\n            <div class=\"header-text\">\n\n                <div class=\"post__meta\">\n\n                    <div class=\"post__date\">\n                        Sep 2, 2025 <\/span>\n                    <\/div>\n\n                    <div class=\"post__categories\">\n\t                    <a href=\"https:\/\/www.climatechangenews.com\/category\/sponsored\/\">Sponsored<\/a>\n                    <\/div>\n\n                <\/div>\n\n                <h3 class=\"post__title\"><a href=\"https:\/\/www.climatechangenews.com\/2025\/09\/02\/support-grows-for-cop30-just-transition-talks-to-address-critical-minerals\/\" rel=\"bookmark\" target=\"_blank\">Support grows for COP30 &#8216;just transition&#8217; talks to address critical minerals<\/a><\/h3>\n                <div class=\"post__excerpt\">\n                    Developing nations want minerals production and energy access &#8211; not just fossil fuel workers &#8211; to be included in discussions on a fair low-carbon transition                <\/div>\n\n                <div class=\"post__footer\">\n                    <a href=\"https:\/\/www.climatechangenews.com\/2025\/09\/02\/support-grows-for-cop30-just-transition-talks-to-address-critical-minerals\/\" target=\"_blank\" class=\"read-more\">Read more<\/a>\n                <\/div>\n\n\n            <\/div>\n        <\/header>\n\n    <\/article>\n\n\n\n\n\n\n\n\n<\/li><li class=\"uk-slide 72210\">\n\n    <article id=\"post-72210\" class=\"post-72210 post type-post status-publish format-standard has-post-thumbnail hentry category-news tag-critical-minerals tag-energy-transition project_category-clean-energy-frontier membership_period-forever-free\">\n\n        <header class=\"post__header\">\n\n            <div class=\"header-visual\">\n\n                <a href=\"https:\/\/www.climatechangenews.com\/2025\/06\/27\/mining-for-transition-minerals-can-be-responsible-with-joint-push-experts-say\/\" rel=\"bookmark\" target=\"_blank\">\n                <figure class=\"post__image small pos-\">\n                    <img loading=\"lazy\" decoding=\"async\" width=\"480\" height=\"320\" src=\"https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/06\/SERBIA-MINE-VILLAGE-480x320.jpg\" class=\"attachment-small size-small wp-post-image\" alt=\"\" srcset=\"https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/06\/SERBIA-MINE-VILLAGE-480x320.jpg 480w, https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/06\/SERBIA-MINE-VILLAGE-960x640.jpg 960w, https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/06\/SERBIA-MINE-VILLAGE-1440x960.jpg 1440w\" sizes=\"auto, (max-width: 480px) 100vw, 480px\" \/>                <\/figure>\n\n\n                <\/a>\n\n            <\/div>\n\n            <div class=\"header-text\">\n\n                <div class=\"post__meta\">\n\n                    <div class=\"post__date\">\n                        Jun 27, 2025 <\/span>\n                    <\/div>\n\n                    <div class=\"post__categories\">\n\t                    <a href=\"https:\/\/www.climatechangenews.com\/project_category\/clean-energy-frontier\/\">Clean Energy Frontier<\/a>\n                    <\/div>\n\n                <\/div>\n\n                <h3 class=\"post__title\"><a href=\"https:\/\/www.climatechangenews.com\/2025\/06\/27\/mining-for-transition-minerals-can-be-responsible-with-joint-push-experts-say\/\" rel=\"bookmark\" target=\"_blank\">Mining for transition minerals can be responsible with joint push, experts say<\/a><\/h3>\n                <div class=\"post__excerpt\">\n                    Strong regulation and community involvement can help avoid rights abuses and pollution in meeting clean tech demand, said a panel co-hosted by Climate Home                <\/div>\n\n                <div class=\"post__footer\">\n                    <a href=\"https:\/\/www.climatechangenews.com\/2025\/06\/27\/mining-for-transition-minerals-can-be-responsible-with-joint-push-experts-say\/\" target=\"_blank\" class=\"read-more\">Read more<\/a>\n                <\/div>\n\n\n            <\/div>\n        <\/header>\n\n    <\/article>\n\n\n\n\n\n\n\n\n<\/li><li class=\"uk-slide 74334\">\n\n    <article id=\"post-74334\" class=\"post-74334 post type-post status-publish format-standard has-post-thumbnail hentry category-justice category-news tag-heat tag-just-transition\">\n\n        <header class=\"post__header\">\n\n            <div class=\"header-visual\">\n\n                <a href=\"https:\/\/www.climatechangenews.com\/2025\/08\/22\/employers-need-plans-to-protect-workers-from-rising-heat-stress-un-says\/\" rel=\"bookmark\" target=\"_blank\">\n                <figure class=\"post__image small pos-\">\n                    <img loading=\"lazy\" decoding=\"async\" width=\"480\" height=\"321\" src=\"https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/08\/EMIRATES-WEATHER-HEAT-480x321.jpg\" class=\"attachment-small size-small wp-post-image\" alt=\"A worker drinks water during a heatwave in Dubai, United Arab Emirates\" srcset=\"https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/08\/EMIRATES-WEATHER-HEAT-480x321.jpg 480w, https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/08\/EMIRATES-WEATHER-HEAT-960x641.jpg 960w, https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/08\/EMIRATES-WEATHER-HEAT-1440x962.jpg 1440w\" sizes=\"auto, (max-width: 480px) 100vw, 480px\" \/>                <\/figure>\n\n\n                <\/a>\n\n            <\/div>\n\n            <div class=\"header-text\">\n\n                <div class=\"post__meta\">\n\n                    <div class=\"post__date\">\n                        Aug 22, 2025 <\/span>\n                    <\/div>\n\n                    <div class=\"post__categories\">\n\t                    <a href=\"https:\/\/www.climatechangenews.com\/category\/news\/justice\/\">Justice<\/a>\n                    <\/div>\n\n                <\/div>\n\n                <h3 class=\"post__title\"><a href=\"https:\/\/www.climatechangenews.com\/2025\/08\/22\/employers-need-plans-to-protect-workers-from-rising-heat-stress-un-says\/\" rel=\"bookmark\" target=\"_blank\">Employers need plans to protect workers from rising heat stress, UN says<\/a><\/h3>\n                <div class=\"post__excerpt\">\n                    As temperatures rise, the UN&#8217;s health and weather agencies release guidelines to reduce risks for workers facing extreme heat                 <\/div>\n\n                <div class=\"post__footer\">\n                    <a href=\"https:\/\/www.climatechangenews.com\/2025\/08\/22\/employers-need-plans-to-protect-workers-from-rising-heat-stress-un-says\/\" target=\"_blank\" class=\"read-more\">Read more<\/a>\n                <\/div>\n\n\n            <\/div>\n        <\/header>\n\n    <\/article>\n\n\n\n\n\n\n\n\n<\/li><\/ul><ul class=\"uk-slider-nav uk-dotnav\"><\/ul><\/div><\/div>\n\n\n<p>To benefit from the SCF, the EU\u2019s member states are required to submit detailed Social Climate Plans to the European Commission, proving that their policies are inclusive, purpose-oriented and based on high-quality data.<\/p>\n\n\n\n<p>However, until now, only a handful of draft plans have been put out for public consultation within EU countries, and most have yet to submit their plans to the Commission. Without binding plans in place, it&#8217;s becoming increasingly unclear how, or even whether, that social shield will be deployed in time.<\/p>\n\n\n\n<p>Without robust Social Climate Plans, the revenue collected from the new emissions trading system risks becoming a regressive tax, disproportionately hitting low-income households and transport users \u2013 particularly those already suffering from increased energy and transport poverty.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Uneven progress across countries<\/h2>\n\n\n\n<p>A <a href=\"https:\/\/bankwatch.org\/publication\/climbing-together-is-the-social-climate-fund-working-for-those-who-need-it-most\">joint analysis<\/a> by E3G and CEE Bankwatch Network, published in mid-June, revealed significant disparities in the progress of Social Climate Plans across eight Central and Eastern European countries.<\/p>\n\n\n\n<p>Some of them &#8211; most notably Estonia, Latvia and Poland &#8211; have published draft Social Climate Plans outlining how they will channel their SCF allocations to fund building renovations, clean mobility and direct income support.<\/p><div class=\"clima-in-post-2\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"clima-372980209\"><div style=\"text-align:center; margin: 20px 0;\">\r\n  <div style=\"display: flex; align-items: center; justify-content: center; margin-bottom: 8px;\">\r\n    <hr style=\"flex: 1; max-width: 80px; border: none; border-top: 1px solid #ccc; margin: 0 10px;\">\r\n    <span style=\"font-family: Open Sans, sans-serif; font-size: 12px; color: #BFBFBF; text-transform: uppercase; letter-spacing: 1px;\">Advertisement<\/span>\r\n    <hr style=\"flex: 1; max-width: 80px; border: none; border-top: 1px solid #ccc; margin: 0 10px;\">\r\n  <\/div>\r\n\r\n  <div id=\"chn-in-post-2\"><\/div>\r\n<\/div>\r\n<script defer src=\"https:\/\/ead.newint.org\/show.php?zones=chn-in-post-2\"><\/script>\r\n<\/div>\n\n\n\n<p>Poland, for instance, proposes allocating 37% of its SCF share to direct income support, 39% to energy-efficient housing, and 21% to transport, while Estonia commits a striking 76% of funds to building renovation and 21% to public transport.<\/p>\n\n\n\n<p>Latvia\u2019s plan foresees investments in energy-efficient apartment buildings and social housing, as well as support for connecting single family homes and social housing to renewable or district heating systems. In the transport sector, the country opts for micro-mobility, such as bicycles and electric bicycles, as well as investments in public transport and cycle-route expansion.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><strong><a href=\"https:\/\/www.climatechangenews.com\/2025\/07\/02\/eu-commission-proposes-allowing-carbon-offsets-to-help-meet-2040-climate-goal\/\" target=\"_blank\" rel=\"noreferrer noopener\">EU Commission proposes allowing carbon offsets to help meet 2040 climate goal<\/a><\/strong><\/p>\n<\/blockquote>\n\n\n\n<p>While these examples deserve praise, the wider picture looks far from ideal,&nbsp;as&nbsp;<a href=\"https:\/\/www.rescoop.eu\/policy\/financing-tracker\/social-climate-fund\">illustrated by an evolving SCF tracker<\/a>,&nbsp;which is a collaborative effort of more than 40 EU and national-level civil society organisations.&nbsp;Several countries, such as Hungary,&nbsp;are vocally fighting against the implementation of ETS2 &#8211; and by extension, the SCF it would finance.&nbsp;&nbsp;<\/p>\n\n\n\n<p>Meanwhile, drafting of the Social Climate Plans is not moving at the necessary pace or with sufficient inclusion. Civil society participation has remained severely limited or non-existent in several countries. And critically, there is growing concern that the window for meaningful reforms is closing fast.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">New EU budget loosens guardrails for just transition<\/h2>\n\n\n\n<p>Another challenge lies in the EU\u2019s new funding priorities. The European Commission unveiled its draft proposal for the 2028\u20132034 Multiannual Financial Framework (MFF) in July, asking governments to construct detailed national and regional partnership plans. On paper, the MFF presents an opportunity to address social vulnerabilities, integrating existing initiatives like the SCF.<\/p>\n\n\n\n<p>This is evident in the fact that member states are obliged to include a dedicated chapter in their respective national and regional plans outlining their planned investments under the Social Climate Fund. However, this exercise is descriptive and is not intended to provide further food for thought on how the MFF could better address growing social vulnerabilities. <\/p>\n\n\n\n<div class=\"chn-block block-image\">\n\n    <figure class=\"\" uk-toggle=\"target: #simg-74760\" >\n        <img decoding=\"async\" src=\"https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/09\/Repsol-pump-scaled.jpg\" srcset=\"https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/09\/Repsol-pump-scaled.jpg 2560w, https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/09\/Repsol-pump-960x720.jpg 960w, https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/09\/Repsol-pump-1440x1080.jpg 1440w, https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/09\/Repsol-pump-480x360.jpg 480w\" \/>\n        <figcaption>Fuel pumps, including 100% &#8220;renewable diesel&#8221; at a service station run by Spanish oil and gas giant Repsol in Barcelona, June 8, 2025. (Photo: Climate Home News\/Megan Rowling)<\/figcaption>    <\/figure>\n\n    <div id=\"simg-74760\"  class=\"uk-modal-container\" uk-modal>\n        <div class=\"uk-modal-dialog uk-margin-auto-vertical\">\n\n            <button class=\"uk-modal-close-default\" type=\"button\" uk-close><\/button>\n\n            <div class=\"uk-modal-body\">\n\n                <figure>\n                    <img decoding=\"async\" src=\"https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/09\/Repsol-pump-scaled.jpg\" srcset=\"https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/09\/Repsol-pump-scaled.jpg 2560w, https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/09\/Repsol-pump-960x720.jpg 960w, https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/09\/Repsol-pump-1440x1080.jpg 1440w, https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/09\/Repsol-pump-480x360.jpg 480w\" \/>\n                    <figcaption>Fuel pumps, including 100% &#8220;renewable diesel&#8221; at a service station run by Spanish oil and gas giant Repsol in Barcelona, June 8, 2025. (Photo: Climate Home News\/Megan Rowling)<\/figcaption>                <\/figure>\n\n            <\/div>\n\n        <\/div>\n    <\/div>\n\n<\/div>\n\n\n\n\n\n\n\n<p>More importantly, by shifting the focus towards increasing competitiveness, instead of much-needed climate and environmental action, the proposal for the EU\u2019s overarching financial framework loosens the very guardrails that would safeguard a just energy transition.<\/p>\n\n\n\n<p>While the new draft EU budget legislation acknowledges the importance of a just transition and regional equity, it introduces several structural shifts that raise red flags \u2013 including the proposed discontinuation of the EU&#8217;s Just Transition Fund as a standalone instrument, and the elimination of the LIFE programme which has long supported environmental and climate action.<\/p>\n\n\n\n<p>In doing so, the budget proposal fails to support initiatives that have proven to be successful from the environmental and social point of view, while opening the door to big players without the strong environmental and social rules needed to hold them to account.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Lessons from early plans can be scaled up<\/h2>\n\n\n\n<p>Despite the mounting risks, there are valuable lessons to draw from countries that have moved ahead with their Social Climate Fund planning. Early frontrunners like Poland and Estonia offer examples that are worth scaling up. <ins><\/ins><\/p>\n\n\n\n<p>The existing draft plans show how the SCPs can address both emissions and energy poverty. It is clear from the <a href=\"https:\/\/bankwatch.org\/press_release\/vulnerable-households-at-risk-central-and-eastern-european-countries-struggle-to-finalise-national-social-climate-plans\">analysis<\/a> that when backed by political will and high-quality consultations, Social Climate Plans can be more than bureaucratic checklists.<\/p>\n\n\n\n<p>They can \u2013 and should \u2013 become tangible action plans,&nbsp;topped up by additional revenues from ETS1 and ETS2 to maximise their transformative potential. To enhance transparency and increase implementation quality, monitoring committees should be appointed in all member states.&nbsp;<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><strong><a href=\"https:\/\/www.climatechangenews.com\/2025\/06\/18\/workers-and-grassroots-groups-push-just-transition-agenda-at-bonn-climate-talks\/\" target=\"_blank\" rel=\"noreferrer noopener\">Workers and grassroots groups push Just Transition agenda at Bonn climate talks<\/a><\/strong><\/p>\n<\/blockquote>\n\n\n\n<p>Without a broader strategy for mainstreaming, ensuring a socially just and fair transition across the EU will remain highly challenging.<\/p>\n\n\n\n<p>Such a transition requires equity considerations at all levels of climate and energy policy-making \u2013 not just in targeted compensation mechanisms. This includes embedding social impact assessments into regulatory frameworks, fostering inclusive governance, and aligning labour, housing and education policies with climate goals. <\/p>\n\n\n\n<p>Unless a holistic approach is adopted, there is a real risk that vulnerable groups will continue to bear a disproportionate cost burden, undermining both public support and the long-term sustainability of the green transition.<\/p>\n","protected":false},"excerpt":{"rendered":"The expansion of Europe&#8217;s emissions trading system to buildings and road transport needs comprehensive social measures to cushion the poorest groups from cost increases","protected":false},"author":196,"featured_media":74748,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[6,4228,5314,4086],"tags":[3128,164,4150,4526],"project_category":[],"membership_period":[5489],"coauthors":[5484],"class_list":["post-74738","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","category-justice","category-politics","category-sponsored","tag-carbon-pricing","tag-european-union","tag-just-transition","tag-just-transition-fund","membership_period-forever-free"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Without robust action, new EU carbon pricing plan could leave vulnerable people behind<\/title>\n<meta name=\"description\" content=\"The expansion of Europe&#039;s emissions trading system to buildings and road transport needs comprehensive social measures to cushion the poorest groups from cost increases\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.climatechangenews.com\/2025\/09\/03\/without-robust-action-new-eu-carbon-pricing-plan-risks-leaving-vulnerable-people-behind\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Without robust action, new EU carbon pricing plan could leave vulnerable people behind\" \/>\n<meta property=\"og:description\" content=\"The expansion of Europe&#039;s emissions trading system to buildings and road transport needs comprehensive social measures to cushion the poorest groups from cost increases\" \/>\n<meta property=\"og:url\" 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