THE EU PARLIAMENT has approved a plan for a fund to support people and groups who are most likely to be impacted by the societal transition to combat the climate crisis, especially in the areas of energy and transport.
The Social Climate Fund, which is to be established in 2026, was passed during a plenary session in Strasbourg this morning with 521 MEPs voting in favour, against 75 opposed and 43 abstentions.
Once fully implemented, the fund is expected to include a total of €86 billion “to ensure that the climate transition will be fair and socially inclusive”.
“Vulnerable households, micro-enterprises and transport users who are particularly affected by energy and transport poverty will benefit from this,” an EU press statement said.
€65 billion will be funded through auctioning industrial emissions allowances, with the remainder coming from national resources.
The approval for the fund came as part of a series of votes in the parliament today on important climate legislation at the heart of the EU’s ’Fit for 55′ plan to reduce the bloc’s greenhouse gas emissions by at least 55% by 2030 compared to 1990.
In 2015, countries committed under the Paris Agreement to try to limit global warming to 1.5 degrees and not to allow it to surpass 2 degrees. The world is currently around 1.1 degrees warmer than pre-industrial times and is already experiencing impacts of the climate crisis such as heatwaves, droughts and melting ice sheets.
Global surface temperatures are expected to exceed 1.5 and 2 degrees unless “deep reductions” are made to emissions. Already, the scale of recent changes to the climate are “unprecedented” over hundreds and thousands of years, according to the Intergovernmental Panel on Climate Change (IPCC).
Another key piece of legislation voted on today was a reform of the EU’s emissions trading system (ETS), which puts a cap on the amount of emissions that certain industries can produce.
Within the cap, which decreases each year, companies can buy and trade emission ‘allowances’.
MEPs voted (413 in favour to 167 against and 57 abstentions) to increase the system’s stringency, demanding a 62% reduction in emissions by 2030 compared to 2005, and to phase out from 2026 a practice of allocating some allowances for free.
To date, the ETS has included companies operating in the sectors of electricity and heat generation, energy-intensive industry (oil refineries, steel works, and the production of certain materials like iron and aluminium) and, aviation within the European Economic Area. The reform will include emissions from the maritime sector for the first time and create an additional system for road transport fuel and buildings from 2027 or 2028.
A revision of the ETS came before the European Parliament last year but was rejected over concerns that right-wing parties had watered down the proposal’s initial level of ambition.
The reform was sent back to a committee stage, which also delayed the approval of the Social Climate Fund because its funding stream is tied to the revenue raised through auctioning emissions allowances under the ETS.
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