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EU Emissions Trading System (EU ETS) and the Social Climate Fund

As part of the Fit for 55 package of policy reforms, a revision of the EU Emissions Trading System (ETS) Directive has entered into force mid-June 2023, with the main objective to align EU policy instruments with the 2030 climate target of at least -55% emission reductions compared to 1990. The existing EU ETS has been enlarged and strengthened. A new emissions trading system (ETS2) has been created and covers CO2 emissions from fossil fuel combustion in buildings and road transport and industry which is not covered by the existing ETS (ETS1). These changes to the EU ETS come hand in hand with the establishment of the Social Climate Fund, meant to address the social impacts that could arise from the ETS2. It will help ensure that the green transition is fair and leaves no one behind.

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