The Social Climate Fund (SCF) is a pivotal component of the European Union’s strategic framework for addressing the socioeconomic impacts anticipated with the establishment of the Emissions Trading System (ETS2) for the carbon dioxide (CO₂) emissions from fuel combustion in buildings, road transport, and small industries. This new regulatory mechanism represents a major step toward fulfilling the EU’s commitment to climate neutrality by 2050, focusing on sectors that have shown limited progress in terms of their decarbonisation during the past years. By setting a price on carbon emissions in these new sectors, ETS2 aims to reduce greenhouse gas emissions through market-driven adjustments. However, the associated increase in energy and transportation costs poses a significant burden, especially for vulnerable groups that may struggle to absorb these additional expenses and invest accordingly. Low-income households and small businesses that rely on affordable energy and means of transport are especially susceptible to the economic impacts of ETS2.
To support these groups, the SCF was established with Regulation (EU) 2023/955 to mobilise approximately €86.7 billion over the period from 2026 to 2032. The SCF is designed to mitigate the regressive effects of ETS2 by providing targeted financial support to Member States, which can then develop measures tailored to their specific national, regional and local needs. These measures can include investments in energy efficiency, clean mobility solutions, and even temporary direct income support to help protect vulnerable groups against increased living costs. The SCF aims to ensure that the transition to a green economy is equitable and inclusive, safeguarding social stability while advancing environmental objectives. To benefit from the funding under the SCF, all EU member states are required to prepare a Social Climate Plan (SCP) by June 2025.
The successful preparation of Greece’s SCP relies on an inclusive, collaborative stakeholder engagement process. This process involves a wide array of stakeholders—including government authorities, economic and social partners, civil society organisations, and research institutions—to ensure that the SCP accurately reflects the needs and interests of all affected groups.
The aim of this report is to present the findings of the assessment of ETS2 impacts that can be helpful for the Social Climate Plan in Greece. More specifically, it departs from the vulnerability in households, transport and micro-enterprises, and it is followed by the expected impacts of the increase in the energy costs of vulnerable groups as a result of the ETS2. Finally, the report presents policy recommendations to alleviate the financial burden to the vulnerable households for the Greek Social Climate Plan.
