The European Commission in the Fit for 55 packages proposes to include fuels used in transport and heating residential buildings in the CO2 emission allowance system (ETS). However, in the pandemic, energy poverty has increased. Therefore, the EC also proposes to establish a Social Fund for Climate Action.
The funds from this fund are intended to help Member States finance investments in thermal modernization and less emission-efficient means of transport.
In the years 2025-2032, the value of the Fund is expected to amount to €72.2 billion. That’s 25 percent of the amount expected from trading CO2 certificates from these sectors.
The estimated total impact from the new ETS mechanism for transport and residential buildings in the period 2025-2032 would amount to €289 billion. Assuming similar revenues in 2033-2040, the final amount would exceed €600 billion.
This is in line with one of the scenarios of the Polish Economic Institute (PIE) (“current scenario”). The total expenditure of the EU-27 in 2025-2040 due to the new CO2 emission allowance system in the transport sector would amount to €361 billion. By contrast, in the residential building sector, it would cost €272 billion.
In the moderate PIE scenario, the additional cost of CO2 emission allowances for residential buildings in Poland may amount to €43 billion in the years 2025-2040. This is almost 3 times more than for Spain. This variation is reflected in the distribution of the Social Fund for Climate Action. In the years 2025-2032, Poland may receive up to €12.7 billion from it, which is nearly 18 percent of the entire amount.