New Local Alliance policy brief reveals local and regional governments still left out of national Social Climate Plans
Local and regional governments are once again being excluded from critical decisions that directly affect their communities. The Local Alliance calls on Member States and the European Commission to meaningfully involve subnational authorities in the planning and implementation of the Social Climate Fund (SCF).
Despite the far-reaching impact of the SCF on towns, cities and regions, the authorities closest to the people’s needs are often left out of national planning. A new policy brief from the Local Alliance—a coalition of Europe’s leading city and regional networks comprising ACR+, CEMR, Climate Alliance, Energy Cities, Eurocities, FEDARENE, ICLEI Europe, and POLIS— confirms the widespread absence of structural engagement with local and regional governments in developing national Social Climate Plans (nSCPs).
The briefing calls on Member States and the European Commission to urgently reinforce multilevel governance and meaningfully include regional and local governments in SCF planning and implementation. With genuine dialogue and inclusion, the SCF will have more equitable, targeted, and impactful interventions, reaching those most affected by the transition.
A missed opportunity in ETS2 and SCF
The revised Emissions Trading System (ETS2) and the SCF are central to achieving the EU’s 2030 climate goals. ETS2 extends carbon pricing to additional sectors, including emissions from fuel combustion in buildings, road transport, and smaller industries. These sectors have a sensible social impact, so the SCF intends to protect vulnerable households at risk of energy or transport poverty.
Energy poverty is a growing concern across Europe. Since the energy prices spiked after Russia’s war in Ukraine, 10.6% of Europeans in 2023 were unable to keep their homes warm. According to a Joint Research Centre (JRC) study, between 8% and 16% of Europeans may be considered energy poor. These numbers are worrisome, exacerbated by low household income, rising energy costs, and poor insulation in buildings.
Transport poverty presents another major barrier to social and economic inclusion, especially in suburban and rural areas. Decades of car-centric planning have left many citizens without affordable and accessible transport needed for work, healthcare, or other essential services. A study in the Netherlands found that between 113,000 and 270,000 households—primarily in medium-sized cities—struggle with the dual burden of low income and high fuel costs, exposing them to transport poverty.
Since poverty is multidimensional, tackling energy and transport poverty requires a holistic, inclusive approach that reflects the real needs of diverse territories. In this regard, the SCF can be a crucial tool to address transport poverty by implementing meaningful solutions that promote sustainable, equitable, and inclusive transport systems.
Between 2026 and 2032, the SCF is expected to channel €86 billion into the energy and mobility sectors to mitigate the social impacts of ETS2. To access these funds, Member States must submit their national Social Climate Plans by 30 June 2025.
However, to deliver structural change, SCF investments must respond to region-specific needs, taking into account local infrastructure, vulnerabilities, and socio-economic conditions. And who understands these better than local and regional authorities?
A survey across 14 countries
The briefing is based on a follow-up survey conducted by the coalition’s member organisations between April and May 2025. It builds on a previous briefing and survey, which already highlighted Member States’ failure to meet key requirements of the SCF Regulation, in particular with Articles 4 and 5 on public consultations.
This second assessment analyses the final stages of nSCP development, evaluating whether local and regional authorities have been involved in co-design and whether their recommendations have been integrated. Findings show significant variation: while some governments involved municipalities early on, others offered only minimal information or consulted them after plans were finalised.
Despite encouragement from the Commission, many Member States continue to disregard input from local stakeholders. This approach echoes the failures seen during the Recovery and Resilience Facility, where limited local involvement led to missed opportunities and weakened territorial ownership.
Without genuine multilevel governance, Member States risk replicating these mistakes. If the principles of multilevel governance and partnership are not respected, then local and regional governments will have limited opportunities to shape investments and reforms, failing to deliver place-based solutions and undermining the legitimacy and effectiveness of EU investments.
Towards inclusive, locally informed, and publicly supported measures
As stakeholder participation is central to the SCF’s success, there is an urgent need for clearer procedures, greater transparency, and more responsive governance. With the deadline for nSCPs fast approaching, Member States still have a critical opportunity to collaborate meaningfully with local and regional authorities both in design and implementation.
While the EU prepares the next multiannual financial framework (MFF), the Local Alliance reiterates its call for Member States to embed local engagement at every stage of policy development. This includes aligning SCF measures with local strategies, such as SECAPs and SUMPs, ensuring direct allocation of funds to local governments, and investing in municipal capacity to implement inclusive and effective climate action.
The Local Alliance further calls on the European Commission to enhance its monitoring of the multilevel design and governance of nSCPs. Strengthened monitoring will ensure that national plans are not only technically sound but also inclusive, territorially responsive, and socially just.
Ultimately, embracing multilevel governance not merely as a formality but as a guiding principle in both designing and implementing policies will strengthen public trust, improve policy coherence, and enhance the legitimacy of EU action. By embedding these principles into the next MFF and continuing to evolve the SCF accordingly, the EU can better support all its territories in achieving a just transition.
Read the full policy brief here.
