PKEE's position on the Social Climate Fund

The Polish Electricity Association (PKEE) welcomes the idea of creating the Social Climate Fund (“the Fund”) and believes that it might be a helpful tool in ensuring a just transition and reducing energy poverty. However, the cost of increasing energy prices for households may be only partially mitigated by the Fund.

The European Green Deal is a huge programme, which will undoubtedly bring many benefits but also cause additional costs. The impact assessment underpinning the 2030 Climate Target Plan found that an increase of the 2030 emission target to -55% raises the energy-related household expenditure. The Fund is intended to alleviate the social and distributional burden of the price impact of emissions trading on sectors of buildings and road transport, and to facilitate clean investments. In the PKEE’s opinion the Fund should focus not only on burden mitigation in the sectors of buildings and road transport but also in the sectors which are already covered by the ETS, notably the energy sector including district heating (DH). To ensure that the transition is really just and inclusive it is crucial to protect vulnerable electricity and heat consumers from energy poverty, which should be made i.a. by programmes co-financed by the Fund. Moreover, the PKEE understands the approach to support only climate-friendly initiatives but we are against direct references to the EU Taxonomy, which in practice might exclude necessary investments, in particular in DH, from the scope of the Fund.

The Fund is dedicated in particular to vulnerable households, transport users and micro-enterprises. However, energy companies will play an important role in the implementation of many climate-related programmes. Therefore energy enterprises, regardless of their size, should be eligible to participate in the Fund if they contribute to the main goal, for example by providing the necessary infrastructure for prosumers or electric vehicles.

The PKEE appreciates that the Commission has noticed the importance of supporting the measures and investments that can also help reduce air pollution, since the fight against pollution is also a fight for fairness and equality. The PKEE would like to emphasise that in the case of Poland a serious problem with air quality is caused mostly by individual heating sources. In the PKEE’s opinion a broad spectrum of solutions that can help reduce air pollution should be included in the Fund. This is why we expect that investments in DH systems (i.e. construction or upgrade of the generation unit and distribution networks, including connections to households), which provide clean district heat to numerous users and significantly improves air quality, will also be supported by the Fund.

The impact on financially vulnerable social groups varies from one Member State to another, and the rise in energy prices is likely to be more severe for Member States, regions and people on lower incomes. Given the share of energy and heating costs in household budgets and the scale of the energy poverty risk, we appreciate the Commission's proposal that Poland should be the largest beneficiary of this Fund. However, in view of the enormous challenges in the country, we are concerned that EUR 12.7 billion will not be sufficient to alleviate the social impact in Poland by 2032. The Commission also stressed that direct support to vulnerable households should be temporary, so it is not clear what kind of support will be possible after 2032. Furthermore, we are concerned that the Fund only accounts for 25% of ETS revenues in the transport and buildings sector. Moreover, it is not clear where exactly these funds will come from, as it may be operationally difficult to use the multiannual financial framework. It is also worth emphasising that a fair transition requires mobilisation of all available funds.

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PKEE's position on the Social Climate Fund

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