Regulation (EU) 2023/955 of the European Parliament and of the Council of 10 May 2023 establishing a Social Climate Fund and amending Regulation (EU) 2021/1060

CHAPTER I

General provisions

Article 1

Subject matter and scope

This Regulation establishes the Social Climate Fund (the ‘Fund’) for the period from 2026 to 2032.

The Fund shall provide financial support to Member States for the measures and investments included in their Social Climate Plans (the ‘Plans’).

The measures and investments supported by the Fund shall benefit households, micro-enterprises and transport users, which are vulnerable and particularly affected by the inclusion of greenhouse gas emissions from buildings and road transport within the scope of Directive 2003/87/EC, in particular households in energy poverty or households in transport poverty.

Article 2

Definitions

For the purposes of this Regulation, the following definitions apply:

(1) ‘energy poverty’ means energy poverty as defined in Article 2, point (52), of Directive (EU) 2023/1791 of the European Parliament and of the Council (¹);

(2) ‘transport poverty’ means individuals’ and households’ inability or difficulty to meet the costs of private or public transport, or their lack of or limited access to transport needed for their access to essential socioeconomic services and activities, taking into account the national and spatial context;

(3) ‘estimated total costs of the Plan’ means the estimated total costs of the measures and investments included in the Plan;

(4) ‘financial allocation’ means non-repayable financial support under the Fund that is available for allocation, or that has been allocated, to a Member State;

(5) ‘milestone’ means a qualitative achievement used to measure progress towards the achievement of a measure or an investment;

(6) ‘target’ means a quantitative achievement used to measure progress towards the achievement of a measure or investment;

(7) ‘energy from renewable sources’ or ‘renewable energy’ means energy from renewable sources as defined in Article 2, second subparagraph, point (1), of Directive (EU) 2018/2001 of the European Parliament and of the Council (²);

(8) ‘household’ means a private household as defined in Article 2, point (15), of Regulation (EU) 2019/1700 of the European Parliament and of the Council (³);

(9) ‘micro-enterprise’ means an enterprise that employs fewer than 10 persons and whose annual turnover or annual balance sheet does not exceed EUR 2 million, calculated in accordance with Articles 3 to 6 of Annex I to Commission Regulation (EU) No 651/2014 (⁴);

(10) ‘vulnerable households’ means households in energy poverty or households, including low income and lower middle-income ones, that are significantly affected by the price impacts of the inclusion of greenhouse gas emissions from buildings within the scope of Directive 2003/87/EC and lack the means to renovate the building they occupy;

(11) ‘vulnerable micro-enterprises’ means micro-enterprises that are significantly affected by the price impacts of the inclusion of greenhouse gas emissions from buildings or road transport within the scope of Directive 2003/87/EC and that, for the purpose of their activity, lack the means either to renovate the building they occupy, or to purchase zero- and low-emission vehicles or to switch to alternative sustainable modes of transport, including public transport, as relevant;

(12) ‘vulnerable transport users’ means individuals and households in transport poverty, but also individuals and households, including low income and lower middle-income ones, that are significantly affected by the price impacts of the inclusion of greenhouse gas emissions from road transport within the scope of Directive 2003/87/EC and lack the means to purchase zero- and low-emission vehicles or to switch to alternative sustainable modes of transport, including public transport;

(13) ‘building renovation’ means any kind of energy-related building renovation, which has the aim of increasing the energy performance of buildings, such as the insulation of the building envelope, that is to say the walls, roof, floor and the replacement of windows, and the installation of technical building systems, compliant with any relevant national safety standards, including by contributing to the renovation requirements established in the Directive of the European Parliament and of the Council on the energy performance of buildings (recast);

(14) ‘technical building system’ means the technical equipment for space heating, space cooling, ventilation, domestic hot water, building automation and control, on-site renewable energy generation and storage, or a combination of such technical equipment, including those systems using energy from renewable sources, of a building or building unit;

(15) ‘active customer’ means an active customer as defined in Article 2, point (8), of Directive (EU) 2019/944 of the European Parliament and of the Council (⁵);

(16) ‘citizen energy community’ means a citizen energy community as defined in Article 2, point (11), of Directive (EU) 2019/944;

(17) ‘renewable energy community’ means a renewable energy community as defined in Article 2, point (16), of Directive (EU) 2018/2001;

(18) ‘peer-to-peer trading of renewable energy’ means peer-to-peer trading of renewable energy as defined in Article 2, point (18), of Directive (EU) 2018/2001;

(19) ‘zero- and low-emission vehicle’ means zero- and low- emission vehicle as defined in Article 3(1), point (m), of Regulation (EU) 2019/631 of the European Parliament and of the Council (⁶).

Article 3

Objectives

CHAPTER II

Social Climate Plans

Article 4

Social Climate Plans

The Plan shall include national and, where relevant, local and regional measures and investments, in accordance with Article 8, to:

(a) carry out building renovation, and decarbonise heating and cooling of buildings, including the integration of renewable energy generation and storage;

(b) increase the uptake of zero- and low-emission mobility and transport.

Article 5

Public consultation

Each Member State shall include in its Plan a summary of:

(a) the consultation held pursuant to paragraph 1; and

(b) how the input of the stakeholders who participated in the consultation is reflected in the Plan.

Article 6

Content of Social Climate Plans

The Plan shall set out the following elements:

(a) concrete measures and investments in accordance with Articles 4 and 8 to reduce the effects referred to in point (d) of this paragraph, together with an explanation of how those measures and investments would contribute effectively to the achievement of the objectives set out in Article 3 within the overall setting of a Member State’s relevant policies;

(b) where relevant, concrete, mutually coherent and reinforced accompanying measures to accomplish the measures and investments and reduce the effects referred to in point (d);

(c) information on existing or planned financing of measures and investments from other Union, international, public or, where relevant, private sources which contribute to the measures and investments set out in the Plan, including information on temporary direct income support;

(d) an estimate of the likely effects of the increase in prices resulting from the inclusion of greenhouse gas emissions from buildings and road transport within the scope of Directive 2003/87/EC on households, in particular on incidence of energy poverty and transport poverty, and on micro-enterprises; those effects are to be analysed at the appropriate territorial level as defined by each Member State, taking into account national specificities and elements, such as access to public transport and basic services, and identifying the areas mostly affected;

(e) an estimated number of, and the identification of, vulnerable households, vulnerable micro-enterprises and vulnerable transport users;

(f) an explanation of how the definitions of energy poverty and transport poverty are to be applied at national level;

(g) where the Plan provides for measures as referred to in Article 4(3), the criteria for the identification of eligible final recipients, the envisaged time limit for the measures in question and their justification on the basis of a quantitative estimate and a qualitative explanation of how those measures are expected to reduce energy poverty, transport poverty and the vulnerability of households to an increase in the price of road transport and heating fuel;

(h) envisaged milestones, targets and an indicative comprehensive timetable for the implementation of the measures and investments to be completed by 31 July 2032;

(i) where applicable, a timetable for the gradual reduction of support for low-emission vehicles;

(j) the estimated total costs of the Plan, accompanied by appropriate justification and explanations of how they are in line with the principle of cost efficiency and commensurate to the expected impact of the Plan;

(k) the envisaged national contribution to the estimated total costs of the Plan, calculated in accordance with Article 15;

(l) except for the measures referred to in Article 4(3) of this Regulation, an explanation of how the Plan ensures that none of the measures or investments would do significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852;

(m) the arrangements for the effective monitoring and implementation of the Plan by the Member State concerned, in particular of the proposed milestones and targets, the relevant common indicators referred to in Annex IV, and if none of those indicators are relevant for a specific measure or investment, additional individual indicators proposed by the Member State concerned;

(n) for the preparation and, where available, for the implementation of the Plan, a summary of the public consultation process referred to in Article 5;

(o) an explanation of the Member State’s system to prevent, detect and correct fraud, corruption and conflicts of interests when using the financial allocation provided under the Fund, and of the arrangements that aim to avoid double funding from the Fund and other Union programmes;

(p) where applicable and relevant, an explanation of how geographic specificities, such as islands, outermost regions and territories, rural or remote areas, less accessible peripheries, mountainous areas or areas lagging behind, have been taken into account in the Plan;

(q) where relevant, an explanation of how the measures and investments aim to address gender inequality.

The Plan shall be consistent with the information included in and the commitments made by the Member State under the following:

(a) the European Pillar of Social Rights Action Plan;

(b) its cohesion policy programmes under Regulation (EU) 2021/1060;

(c) its recovery and resilience plan under Regulation (EU) 2021/241;

(d) its building renovation plan under the Directive of the European Parliament and of the Council on the energy performance of buildings (recast);

(e) its updated integrated national energy and climate plan under Regulation (EU) 2018/1999; and

(f) its territorial just transition plans under Regulation (EU) 2021/1056.

CHAPTER III

Support from the fund for Social Climate Plans

Article 7

Principles governing the Fund

Payment of financial support pursuant to paragraph 1 of this Article to each Member State shall be conditional upon that Member State achieving the milestones and targets for the measures and investments in accordance with Article 8 of this Regulation. Those milestones and targets shall be compatible with the Union’s climate targets and the objective set out in Regulation (EU) 2021/1119, and shall cover in particular:

(a) energy efficiency;

(b) building renovation;

(c) zero- and low-emission mobility and transport;

(d) greenhouse gas emission reductions;

(e) reductions in the number of vulnerable households, in particular households in energy poverty, of vulnerable micro-enterprises and of vulnerable transport users.

Article 8

Eligible measures and investments to be included in the Social Climate Plans

The Member State may include in the estimated total costs of the Plan the following measures and investments with lasting impacts, provided they principally target vulnerable households, vulnerable micro-enterprises or vulnerable transport users and intend to:

(a) support building renovations, in particular for vulnerable households and vulnerable micro-enterprises occupying the worst performing buildings, and including for tenants and people living in social housing;

(b) support access to affordable energy-efficient housing, including social housing;

(c) contribute to the decarbonisation, such as through electrification, of heating and cooling of, and cooking in, buildings by providing access to affordable and energy-efficient systems, and by integrating renewable energy generation and storage, including through renewable energy communities, citizen energy communities and other active customers to promote the uptake of the self-consumption of renewable energy, such as energy sharing and peer-to-peer trading of renewable energy, connection to smart grids and to district heating networks, that contributes to achieving energy savings or to reducing energy poverty;

(d) provide targeted, accessible and affordable information, education, awareness and advice on cost-effective measures and investments, available support for building renovations and energy efficiency, as well as sustainable and affordable mobility and transport alternatives;

(e) support public and private entities, including social housing providers, in particular public-private cooperatives, in developing and providing affordable energy efficiency solutions and appropriate funding instruments in line with the social goals of the Fund;

(f) provide access to zero- and low-emission vehicles and bicycles, while maintaining technological neutrality, including financial support or fiscal incentives for their purchase as well as for appropriate public and private infrastructure, in particular, where relevant, purchase of zero- and low-emission vehicles, infrastructure for recharging and refuelling and development of a second-hand zero-emission vehicles market; Member States shall aim to ensure that where zero-emission vehicles are an affordable and deployable solution, support to such vehicles is prioritised in their Plans;

(g) incentivise the use of affordable and accessible public transport and support private and public entities, including cooperatives, in developing and providing sustainable mobility on demand, shared mobility services and active mobility options.

Article 9

Pass-on of benefits to households, micro-enterprises and transport users

Article 10

Resources of the Fund

The annual amounts allocated to the Fund, within the limit of the maximum amount laid down in the first subparagraph of this paragraph, shall not exceed the amounts referred to in Article 30d(4), fourth subparagraph, of Directive 2003/87/EC.

Where the emission trading system established in accordance with Chapter IVa of Directive 2003/87/EC is postponed until 2028 pursuant to Article 30k of that Directive, the maximum amount to be made available to the Fund shall be EUR 54 600 000 000 and the annual amounts allocated to the Fund shall not exceed the respective amounts referred to in the Article 30d(4), fifth subparagraph, of Directive 2003/87/EC.

Article 11

Resources from and to shared management programmes and use of resources

Article 12

Implementation

The Fund shall be implemented by the Commission under direct management in accordance with the relevant rules adopted pursuant to Article 322 TFEU, in particular Regulation (EU, Euratom) 2018/1046 and Regulation (EU, Euratom) 2020/2092 on a general regime of conditionality for the protection of the Union budget.

Article 13

Additionality and complementary funding

Article 14

Maximum financial allocation

Article 15

National contribution to the estimated total costs

Member States shall contribute at least to 25 % of the estimated total costs of their Plans.

Article 16

Commission assessment

The Commission shall assess the relevance, effectiveness, efficiency and coherence of the Plan, taking into account the specific challenges and the financial allocation of the Member State, as follows:

(a) for the purpose of assessing relevance, the Commission shall take into account the following criteria: (i) whether the Plan represents an adequate response to the social impact on and challenges faced by vulnerable households, vulnerable micro-enterprises and vulnerable transport users in the Member State concerned from the inclusion of greenhouse gas emissions from buildings and road transport within the scope of Directive 2003/87/EC, in particular households in energy poverty or households in transport poverty, duly taking into account the challenges identified in the assessments of the Commission of the update of the concerned Member State’s integrated national energy and climate plan and of its progress pursuant to Article 9(3), and Articles 13 and 29 of Regulation (EU) 2018/1999, as well as in the Commission recommendations to Member States issued pursuant to Article 34 of Regulation (EU) 2018/1999 in view of the Union’s 2030 climate and energy targets and long-term objective of climate neutrality in the Union at the latest by 2050; (ii) whether the Plan is expected to ensure that measures and investments included in the Plan do not significantly harm environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852 and whether the Plan helps reduce fossil fuel dependency; (iii) whether the Plan contains measures and investments that contribute to the green transition, including to addressing the social impacts and challenges resulting therefrom and in particular to the achievement of the Union’s 2030 climate and energy targets and long-term objective of climate neutrality in the Union at the latest by 2050 and the 2030 milestones of the Union’s Sustainable and Smart Mobility Strategy;