Finding alternative ways to finance the Social Climate Fund

Lessons learnt from EU Member States using the Emission Trading Scheme money to fund housing renovations for low-income households

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In this paper, we see that lessons can be learned from existing national programs investing revenues from the EU Emissions Trading System (ETS) to finance socially-just renovations to increase the energy efficiency of buildings. In the latest advancement on the extension of the EU ETS to road transport and buildings (the compromise in Parliament on EU ETS 2 and Social Climate Fund), the Social Climate Fund is expected to be reduced dramatically from €72bn to €16bn due to compromises on the ETS 2. FEANTSA advocates for the urgent use of different sources of funding, such as the existing ETS, to finance the renovation wave and the Social Climate Fund.

In this report, FEANTSA stresses that particular attention must be paid to avoid reproducing errors from the national programs using the existing ETS for renovations. These correspond to:

  • a lack of information available for households
  • a disproportionate use of the financing for new buildings
  • the ex-post financing which can be challenging for low-income households
  • an insufficient number of renovations
  • no direct assistance for low-income households
  • no additional public funding over the years
  • insufficient assistance to the consumers
  • not considering the non-financial barriers that can lead to the abandonment of the renovation works.