Third Thematic Report: Climate Policy Challenges in Energy Crisis: How to Reduce Dependence on Fossil Fuels in CEE Through Effective Social-Climate Measures

The report examines how six Central and Eastern European countries – Bulgaria, Hungary, Latvia, Poland, Romania, and Slovenia – have responded to the 2026 fossil fuel price shock triggered by geopolitical tensions while preparing for the delayed implementation of ETS2. 

It finds that most governments have relied on short-term measures such as fuel tax reductions, price caps, and subsidies, which may temporarily ease costs but also encourage continued fossil fuel consumption, primarily benefit higher-income households, and undermine long-term climate goals. At the same time, the report highlights more effective alternatives, including targeted support for vulnerable households, investments in energy efficiency, renewable energy, public transport, and the strategic use of ETS revenues to accelerate a socially just energy transition. 

The report concludes that governments should replace broad fossil fuel subsidies with targeted social support and stronger climate policies that reduce dependence on fossil fuels while protecting those most affected by rising energy costs. It recommends using carbon pricing revenues and windfall taxes to finance fair climate measures, alongside policies that promote clean mobility, energy-efficient buildings, and renewable energy.

Find full report here.

Photo: Unsplash/ Eelco Bothlingk