The size of the ‘Social Climate Fund’ (SCF) and the EU Council’s refusal to allow co-financing for implemented measures will be the main sticking points for the co-legislators, who will meet from 16 December for a ‘super trilogue’ which is expected to continue on 17 December and could lead to a deal.
This was the conclusion reached by Dutch MEP Esther de Lange (EPP), co-rapporteur with David Casa (EPP, Maltese) during a press briefing on the SCF in Strasbourg on Wednesday 14 December.
For Ester de Lange, the question of the size of the SCF is all the more relevant with the EU Council’s wish to extend ETS2 to private households potentially before 2029, whereas for the European Parliament it should only cover buildings and commercial road transport. Currently set at €59 billion, even though the European Parliament is asking for €72 billion, expanding the scope of ETS2 “sooner” is bound to mean that a “bigger fund” is needed. This “will be a key demand of the European Parliament, so as to be able to protect people more quickly”, she said.
Two further questions are asked, in particular on the sustainable measures supported by the national plans: should we only support investments in vehicles, for example with zero or low CO2 emissions? The European Parliament wants to stick to ‘zero emissions’, but “this may not be possible in all areas, so a balance will have to be found between zero and low emissions”, added Ms de Lange.
On the proportion of direct income support provided by the fund (direct support to the poorest households to continue using, for example, services that still pollute), however, the legislators are “very close” to reaching an agreement, according to her.
Agreements have yet to be reached on the inclusion of a gender dimension in the identification of people in fuel poverty and the targeting of measures. The precise definition of fuel poverty is also not yet finalised.
The trilogue on 29 November also raised the possibility of introducing vouchers for the most vulnerable households, in particular to compensate for the extension of the ETS2 to private households.
However, this idea put forward by the European Commission has not aroused any real enthusiasm.
In a preparatory note for this trilogue dated 7 December, the Presidency of the EU Council explains, in any case, that it wants to stick to the key elements of its mandate on the budgetary architecture, but an overall balanced compromise on the dossier “will require some adjustments and flexibility, depending on the discussions regarding ETS2”.
The Presidency will maintain the EU Council’s proposal for the budgetary architecture of the “fund financed by external earmarked revenue and the starting date of the fund in 2027 with retroactive eligibility of expenditure from 1 January 2026”.
On co-financing, “limited co-financing” could be introduced, provided that the European Parliament accepts the budgetary architecture of the fund.
NGO anger
“We are alarmed by the failure of the co-legislators to exclude fossil fuels from financial support of the Social Climate Fund (SCF)”, wrote a collective of associations united behind WWF on 14 December.
The SCF could lock the most vulnerable households and transport users into a dependence on expensive and polluting fossil fuels, instead of investing in insulation and clean technologies, which would allow them to benefit from the transition to climate neutrality.
“More efficient - but still polluting and fossil-fuel based - installations would be eligible for support. And by allowing funding for ‘low emission’ vehicles, rather than zero emissions, SCF resources could perpetuate people’s exposure to fossil fuel (and carbon) prices for longer,” the organisations write.
Links to the preparation of the trilogue and the 4-column document: https://aeur.eu/f/4o8 ; https://aeur.eu/f/4o8
Link to NGOs: https://aeur.eu/f/4oa (Original version in French by Solenn Paulic)