Monthly National Update: August

August brought important developments for both the implementation and future direction of European climate policy. Across Central and Eastern Europe, governments continued working on Social Climate Plans, EU funding and energy policy, but progress remained uneven. At the same time, concerns over energy affordability, economic competitiveness and energy security continued to shape national debates. At EU level, preparations for the upcoming review of the Emissions Trading System are gathering pace, making the coming months particularly important for the future of ETS2 and socially fair climate policy.

Progress on ETS2 and Social Climate Plans across the EU remains mixed. Twenty Member States have now transposed ETS2, while the European Commission is assessing more than 20 Social Climate Plans. Five plans – from Latvia, Lithuania, Malta, Sweden and Greece – have already been adopted, while draft plans from Croatia, Italy, Luxembourg, the Netherlands and Slovenia remain under Commission review. Preparations for the operational phase of ETS2 are also advancing: the auctioning of ETS2 allowances is expected to begin in January 2027, with the auction calendar expected in September. At the same time, Member States that have not transposed ETS2 risk losing access to the related Social Climate Fund support, reinforcing the close connection between implementation of carbon pricing and financing for socially fair transition measures.

At national level, energy security and the use of EU funding remained prominent issues. In Hungary, the government reported completing the milestones required to access €10 billion in grants and loans under the Recovery and Resilience Facility, with investments covering energy, transport, healthcare and education. The country also continued dealing with the consequences of extreme summer conditions. Heat and exceptionally low water levels in the Danube affected the operation of the Paks Nuclear Power Plant and put pressure on the electricity system. In response, significant EU funding is being directed towards energy storage, grid modernisation, and wind and geothermal investments.

Hungarian civil society organisations continued to engage intensively in discussions about how public resources should be used. Clean Air Action Group published an analysis proposing a shift from universal residential energy price subsidies towards market-based pricing combined with targeted household compensation. Further advocacy questioned reductions in VAT on firewood, arguing that direct support for cleaner heating solutions would better target vulnerable households while avoiding additional air pollution and environmental impacts. Civil society also continued advocating for greater investment in building renovation and contributed proposals to the revision of EU funding and performance regulations, as well as to the public consultation on the ETS review.

In Bulgaria, preparations for the Social Climate Plan and other EU funding instruments continued. The government consulted stakeholders on a methodology for assessing transport vulnerability and on changes to the institutional structures responsible for managing the national Social Climate Plan. The country’s NECP also moved forward following completion of the public consultation on its Strategic Environmental Assessment. Civil society organisations contributed formal recommendations to both consultation processes, maintained dialogue with other NGOs and institutions on the SCP and the next MFF, and continued work on the fourth thematic report and preparations for the final ClimateFair Monitor conference.

In Poland, however, there was still no significant progress on ETS2 or the Social Climate Plan. Discussions increasingly focused on future EU funding and national reforms linked to the next Multiannual Financial Framework. The government introduced another temporary low-fuel-price scheme during August, while the proposed windfall tax on energy companies was vetoed by the President. Against expectations of an economic slowdown, civil society organisations are increasingly emphasising the need to safeguard investments currently foreseen under the Social Climate Fund and ensure that socially important measures can proceed even if political resistance to ETS2 continues.

Slovenia continues to face a particularly difficult political environment for climate action. The new government has maintained measures favouring fossil fuel consumption, including higher profit margins for fuel retailers, subsidies for transport companies and low environmental levies and excise duties. Government representatives have also openly questioned the green transition, while support for electric vehicles may not continue despite available funding. Civil society organisations are responding through stronger cooperation within national networks and coalitions, advocacy for socially fair climate measures, and participation in the ETS2 consultation. At the same time, NGOs are confronting broader attempts to restrict civil society participation and weaken environmental safeguards.

In Romania, the completion of the National Recovery and Resilience Plan implementation period at the end of August prompted an assessment of its results. Around half of the available funding – approximately €13 billion – was used, with a significant share directed towards highway infrastructure, while only around half of the promised reforms were implemented. Failure to adopt some reforms also resulted in the loss of substantial EU funding. Civil society organisations continue monitoring developments around the Social Climate Plan and ETS2 while engaging with authorities on the Just Transition Fund, regional development programmes and preparations for the next EU programming period.

In Latvia, where the Social Climate Plan has already been approved, attention is increasingly moving towards implementation. Green Liberty continued dialogue with the Ministry of Climate and Energy on priorities for the next MFF period while also working on the fourth thematic report and the final ClimateFair Monitor conference. With parliamentary elections approaching, environmental organisations are jointly assessing political party programmes, while future advocacy will focus on ensuring effective implementation of the Social Climate Plan and maintaining climate and social transition issues on the political agenda.

At EU level, attention is now turning towards the upcoming ETS review. The European Parliament is expected to begin considering its draft report in October, followed by committee and plenary votes later in the year, with negotiations between the EU institutions potentially beginning in early 2027. These discussions will be important not only for the future design of emissions trading but also for the political environment surrounding ETS2. Civil society organisations are therefore strengthening their engagement with EU and national decision-makers while continuing joint public advocacy, including the “Leave fossil fuels behind, not people” campaign.

Across the region, August once again demonstrated that the success of the climate transition will depend not only on adopting climate legislation but also on how governments respond to energy price pressures, direct public investment and protect vulnerable households. As discussions on the ETS review and the next EU budget intensify, ensuring that public funding accelerates building renovation, cleaner heating, sustainable transport and energy independence – rather than reinforcing fossil fuel dependence – will remain a central priority for civil society.

Photo: Anne Nygard/Unsplash