Second Thematic Report: Preparing for ETS2 and the Social Climate Fund in Central and Eastern Europe

New thematic report examines how Central and Eastern European countries can prepare for the introduction of ETS2 and the Social Climate Fund (SCF). The report analyses key risks, opportunities and policy recommendations across Bulgaria, Hungary, Latvia, Poland, Romania and Slovenia. 

ETS2 will extend carbon pricing to buildings and road transport, while the Social Climate Fund is designed to help vulnerable households and micro-enterprises manage the social impacts of the transition. Together, these instruments can support cleaner heating, more efficient buildings and fairer mobility systems – but only if implemented well. 

The report identifies five major challenges for the region:

• misinformation and political resistance;
• energy and transport poverty;
• misuse or ineffective use of public funds;
• administrative and workforce capacity gaps;
• undesirable behavioural responses such as waste burning, fuel smuggling or fuel tourism. 

At the same time, the report highlights practical solutions: targeted support for vulnerable groups, direct payments where appropriate, stronger communication, better public participation, investment in energy efficiency and public transport, and transparent use of ETS2 revenues.

Read the full report: Preparing for ETS2 and the Social Climate Fund in CEE: challenges, opportunities and recommendations.

Photo: Unsplash/ Krišjānis Kazaks