Proposed EU legislation to set up a ‘social climate’ fund, intended to help poorer people deal with the increased costs of the continent’s plan to become a climate-neutral bloc by 2050, moved a step closer to reality today. 

A report on the fund, drafted by Maltese MEP David Casa and Dutch MEP Esther de Lange (both from the EPP Group), passed a vote at the committees on the Environment, Public Health and Food Safety (ENVI) and on Employment and Social Affairs (EMPL) today, with 107 votes in favour, 16 against and 15 abstentions.

It will now have to pass another vote during a plenary session in June, before negotiations with member states can begin.

To benefit from this fund, EU member states will first have to submit ‘social climate plans’, a coherent set of measures to address energy and mobility poverty.

The EU will then refund member states which provide temporary direct income support to tackle the increase in road transport and heating fuel prices. This support must be limited to a maximum of 40% of the total estimated cost of each national plan for the period 2024-2027 and would have to be phased out by the end of 2032.

The fund would also cover investments in building renovation, renewable energy and shifts from private to public transport, car-pooling and car-sharing, and using active modes of transport to get around, such as cycling. 

Measures may take the form of fiscal incentives, vouchers, subsidies or zero-interest loans.

“The Social Climate Fund is the EU’s answer to the challenge of making the green transition towards climate neutrality a social one,” Casa said. 

“This fund will invest billions in energy efficiency for households and micro-enterprises, which will reduce energy demand and soften the impact of climate measures. All this makes it an essential component of securing European climate neutrality by 2050.”