The rising cost of living and energy prices are a topic that worries many of us. At the same time, we hear about the need to transition to a greener economy, which can raise concerns about additional financial burdens – whether it’s more expensive heating, the need to renovate a house or replace an old car with a more environmentally friendly one.

The European Union is aware of these concerns and has a concrete response. It is the Social and Climate Fund (SCF), a massive financial instrument that aims to ensure that the transition to clean energy and transport is fair and accessible for all. This article will explain everything you need to know about this €86 billion package in five key points.

1. It's not about small things: An 86 billion euro package to protect the vulnerable

The total volume of the fund is €86 billion. Its main and clearly stated objective is to help vulnerable households, transport users and micro-enterprises manage the transition to cleaner forms of energy and transport. The fund is set to officially start its activities in 2026 and will be a key instrument to mitigate the social impacts of the green transition.

2. Concrete help, not abstract promises: What exactly will the money be used for?

The funds from the fund will go towards very practical measures that directly affect the daily lives of people and small businesses. Supported investments include:

• Increasing energy efficiency and renovating buildings.
• Installation of clean heating and cooling systems.
• Solutions for low-emission and zero-emission mobility.

These areas were selected purposefully because they represent the largest cost items for households and small businesses in the transition to more sustainable operations.

3. Cash only for results: An innovative approach to payouts

One of the key principles of the Fund is performance-based disbursement. This means that Member States do not receive money upfront, but only after they have demonstrably met pre-agreed milestones and targets. This model links payments to real and verified results, ensuring the efficient and accountable use of EU resources. At the same time, it gives Member States certainty and predictability in the allocation of funds and creates a strong incentive to deliver results.

4. Voice from below: Engaging local communities and partners

Decisions on the use of the fund will not be taken solely in Brussels. The rules require Member States to actively cooperate with a wide range of partners when drawing up their national social and climate plans. These include regional and local authorities, social partners (such as trade unions and employers' associations) and civil society organisations. The aim of this approach is to ensure that the measures financed truly reflect the real needs of people in the regions.

5. Everything under the microscope: A single digital system for transparency

To ensure maximum transparency and accountability, Member States and the European Commission will use a single digital system to submit, track and evaluate all measures, investments and information on beneficiaries. This system is intended to provide a clear overview of how the funds are used, building public trust in the process.

The Social Climate Fund is an ambitious attempt by the European Union to actively manage the social dimension of the climate transition. The success of this fund will therefore not be measured solely by the amount of money spent, but by the concrete results achieved and the real involvement of local communities in shaping a just transition.

Will this massive fund be enough to ensure that no one is left behind in Europe's transition to a greener future? JRi