The French Presidency of the EU Council will submit a new compromise on the Social Climate Fund (SCF) to the Member State national ambassadors on Wednesday 22 June.
Based on the interactions and questions raised on 17 June during a preparatory discussion for the Environment Council meeting on 28 June, the text seen by EUROPE has new elements including on the management of the fund and the share reserved for direct support (household income support, in the form, for example, of tax exemption measures), with the Presidency proposing a rate of 35% as opposed to the current 40%.
“Member States may include measures providing temporary direct income support to vulnerable households and households that are vulnerable transport users to absorb the increase in road transport and heating energy prices. Such support from the Fund shall decrease over time and shall be limited to the direct impact of the emission trading for buildings and road transport. These measures shall not represent more than (…) 35% of the estimated total cost of the Plan”, explains the new wording.
This new proportion would leave more room for aid for more structural investments and would be in line with the wishes of part of the European Parliament, which wanted to restrict this share of direct support (the European Parliament nevertheless maintained it at 40% in its report adopted in May).
On the management mode, “while keeping the direct performance management mode combined with elements of shared management, the text proposes an additional flexibility. It proposes in Article 10 of the SCF Regulation to allow Member States who so wish to transfer up to 15% of their SCF allocation to their programmes under shared management. This amount should be used for the same objectives as the SCF , but could be implemented under shared management through the ERDF, ESF, Cohesion Fund or Just Transition Fund programmes”, the new text proposes.
The Commission Regulation and its Article 10 do not propose a precise amount. A greater emphasis on shared management therefore means greater involvement of local and regional authorities and more room for manoeuvre in relation to the European Commission, which is also seen favourably by some European Parliament sources.
The compromise also provides for a further simplification. “In order to reduce the administrative burden on Member States, the Presidency proposes to remove Article 7 of the SCF Regulation which prohibited Member States from supporting vulnerable households with the SCF where these households were already receiving aid, except in cases where the Member State could demonstrate that the amount of such aid was not sufficient to compensate for the effects of the BRT ETS (ETS2, the system extended to buildings and road transport, editor’s note)”. The SCF Regulation already requires Member States to ensure that there is no double funding and that the principle of additionality is respected.
And while the question was put to it on 17 June, the French Presidency chose not to modify the volume of the Fund, with some wanting to “reduce it” and others opposing a reduction. “In the light of these discussions, the Presidency does not make any changes to the volume and allocation method proposed by the Commission”, says the text presenting the compromise.
Final green light from the European Parliament
The European Parliament will validate its position on this Fund on 22 June. Unlike the other two flagship texts of the ‘Fit for 55’ package - the revision of the Emissions Trading System (ETS) and the Carbon Border Adjustment Mechanism (CBAM) - the substance of the SCF was not reopened to debate and the amendments voted on during the last plenary, notably on rejecting the inclusion of SMEs, remained intact.
See the document: https://aeur.eu/f/280 (Original version in French by Solenn Paulic)