Identifying vulnerability to the ETS 2 in the CEE region based on the examples of Romania and Poland:

Central and Eastern European (CEE) Member States need special attention in the context of ETS 2 and the Social Climate Fund (SCF). The region has its own patterns of energy and transport vulnerabilities. Lower incomes than the EU average, a large building stock that is old and energy inefficient, larger shares of the population living in rural areas, and heavy reliance on polluting fuels for heating are common features across the region. Moreover, based on both EU-SILC and HBS indicators, countries from CEE have high levels of energy poverty, so they’re particularly vulnerable to energy carriers price fluctuations.

This combination of factors makes CEE region especially vulnerable to the impact of the upcoming ETS2, which is set to put a carbon price on fuels used for heating and road transport across the EU starting from 2027. 

The Policy Brief formulates recommendations for the CEE countries to assist in the assessment and mitigation of these vulnerabilities, including through the recently established Social Climate Fund: 

1. Identify the vulnerable households that will be directly and indirectly impacted by the ETS2. 
2. Design tailored policies, with a focus on programmes for rural population and on low- and middle-income households, addressing the specific vulnerabilities that exist in each country. 
3. Develop working structures across levels of governance that can coordinate the process of designing and implementing the Social Climate Plans.
4. Strengthen the administrative capacity of the relevant national and local authorities, either by seeking additional financial support from the EU or through national mechanisms for the Social Climate Fund implementation.