New EU fund aims to cushion social impact of climate policies

The European Commission will launch a fund to alleviate the societal cost of expanding the EU carbon market – the emissions trading scheme (ETS) – to buildings and road transport, according to a leaked draft seen by EURACTV.

The EU executive is due to announce a new package of climate legislation on Wednesday, aiming to bring the EU in line with its new 2030 objective of cutting emissions by 55% compared to 1990 levels.

The legislative package includes a planned extension of the EU ETS to heating and transport fuels as a way to create incentives for emission cuts there, according to leaked documents obtained by EURACTIV.

The move will be controversial for Poland and senior lawmakers in the European Parliament who have warned that this risks raising fuel prices and hit Europe’s poorest households.

“Do not make the mistake of extending the carbon market to heating and fuel. We experienced it in France, it gave us the Yellow Vests,” French MEP Pascal Canfin warned Brussels as the European Parliament passed the EU’s landmark climate law.

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