The European Parliament’s co-rapporteurs on the Social Climate Fund, David Casa from Malta and Esther de Lange from the Netherlands (both from the EPP group), want to change the earmarking of financial support under the Fund and adapt co-financing rates according to the types of projects financed and the GDP of the Member State, according to a draft report seen by EUROPE on Tuesday 18 January.
Thus, the two MEPs want to cap temporary direct aid for the most vulnerable beneficiaries at a maximum of 25% of the total expenditure of national plans and limit it to a maximum duration of 3 years. This spending does not directly address the root and structural causes of the problem, they argue.
Differentiated co-financing
Furthermore, they propose to modulate co-financing. Where the European Commission proposed a fixed co-financing of 50% of the total costs of the national plans, they suggest that Member States finance at least 60% for temporary direct income support and at least 50% for structural measures and targeted investments.
However, they add a territorial dimension. By way of derogation, the share of national co-financing for structural measures and investments could be limited to 40% for those Member States eligible for a top-up from the Modernisation Fund and whose GDP per capita is below 65% of the EU average during the period 2016-2018.
Importantly, they offer pre-financing at 13% in order to provide substantial funding in the shortest possible time.
Guaranteed budget and better earmarking
On the question of the financing of the Fund, given that there is some uncertainty about the revenues that will be generated by the new system of quotas on road transport and buildings, the rapporteurs call for a guarantee from the EU budget, should carbon prices fall short of the €72.2 billion planned.
Generally speaking, both rapporteurs propose to better target the funds to maximise their impact. For example, regarding support for the purchase of low-emission vehicles, they propose to extend the fund to support the second-hand market. In addition, they state that purchase aid should focus on vehicles in the lowest 50% of the market price range in a given Member State and year.
Another example is the proposal to fund training to ensure a properly trained workforce for building retrofits and alternative fuel infrastructure deployment.
Monitoring and enforcement of the rule of law
In addition, they want to ensure better monitoring of the plans. To this end, they want better involvement of the social partners, but also of regional and local authorities, again to better calibrate the aid, especially for people and companies in rural areas.
They emphasise the link between the use of the Fund and respect for the rule of law by insisting on the suspension or termination of financial assistance in the event of a breach of the fundamental principles governing the European Union.
Finally, the rapporteurs want to strengthen the obligation for Member States and intermediaries to inform final beneficiaries about the European origin of the Social Climate Fund.
Presentation in the joint session on 10 February
The text is expected to be presented to MEPs at a joint meeting of the Committee on Employment and Social Affairs (EMPL) and the Environment and Public Health Committee (ENVI) on 10 February. On the EU Council’s side, negotiations are difficult and are stumbling in particular over the mode of financing the Fund, but also its allocation and co-financing arrangements (see EUROPE 12852/19).
As a reminder, the regulation on the Social Climate Fund, presented last July (see EUROPE 12762/6), is part of the ‘European Green Deal’ to reduce greenhouse gas emissions in the European Union by 55% by 2030 compared to 1990.
Its main objective is to help the most vulnerable European citizens, households and businesses to cope with the additional costs generated by the energy transition. The Fund is financed by a new European emissions trading scheme that covers emissions from buildings and road transport.
To consult the draft report: https://bit.ly/3GHAwk3 (Original version in French by Pascal Hansens and Damien Genicot)