Greece to deploy €5.3B via Social Climate Fund to support households and firms

With a total budget of €5.3 billion for the 2026–2032 period, the new scheme comes at a particularly critical juncture, as the European energy market remains under pressure and Greece is just six months away from the completion of the Recovery and Resilience Facility cycle. The Ministry of National Economy and Finance has already submitted to Parliament the relevant bill for the establishment of the Coordinating Authority and the Special Committee of the Social Climate Fund, which will be responsible for managing resources through 2032.

At the same time, the Greek authorities have submitted to the European Commission a comprehensive proposal comprising 25 measures, most of which are expected to be implemented within 2026.

Pressure from ETS2 and energy poverty

The acceleration of the planning process is directly linked to the extension of the Emissions Trading System (ETS2) from 2027, a development expected to further increase costs for heating oil, natural gas, and transport fuels. For an economy such as Greece’s—where energy poverty remains elevated and a large share of the building stock is outdated and energy-inefficient—the Social Climate Fund is intended to act as a compensatory mechanism to offset these additional burdens.

According to the current plan, the Fund aims to support approximately 1.5 million households and 70,000 businesses, with a focus on lower-income groups, rural areas, and vulnerable social categories.

Key measures for households

The flagship initiative is a new “Energy Upgrade”-type programme, with a total budget of €1.2 billion, targeting 62,000 homes. Subsidies will cover up to 80% of costs, including VAT, meaning that interventions with a budget of €24,800 could cost property owners as little as €5,000.

A significant allocation of €930 million is earmarked for the replacement of heating systems, including subsidies for heat pumps and solar water heaters, reducing private contribution to approximately €2,000.

Particular interest is also attached to the “Social Leasing” programme, with a budget of €174 million, which will subsidize 12,500 households with up to €13,000 for the four-year lease of an electric passenger car, with monthly payments capped at €145.

In parallel, a dedicated €51 million package is предусмотрed for persons with disabilities, offering subsidies of up to 100% for electric wheelchairs, scooters, and handbikes.

Social housing and heating support

In the housing sector, the Fund will finance the construction of 2,350 energy class A+ apartments across four major urban areas, with a total budget of €435 million. These units are expected to accommodate approximately 7,000 low-income residents at reduced rents, under the supervision of the new National Housing Authority.

From 2027 onwards, an annual allocation of €340 million is предусмотрed for heating allowances, including additional support of up to €100 for approximately 780,000 beneficiaries, as a direct offset to ETS2-related cost increases.

Moreover, €40 million will fund the issuance of 200,000 free Energy Performance Certificates (EPCs), which are becoming increasingly important in the real estate market in light of new European regulations.

Support for small business investment

For the business sector, €394 million is allocated to an “Energy Upgrade for Businesses” programme, targeting 10,000 micro-enterprises.

An additional €289 million will support the electrification of professional vehicle fleets, with subsidies covering 40% of the cost for passenger cars and vans, and 30% for trucks.

A dedicated provision is also included for the taxi sector, where subsidies may reach up to €20,000 for electric vehicles and up to €29,000 for accessible vehicles for persons with disabilities.

The key challenge: access and absorption

A critical success factor will be the speed of programme rollout and the effective access of beneficiaries. To this end, the creation of an Energy Support Registry is предусмотрed, including a “Vulnerability Card” and one-stop-shop services in every region.

Efficient absorption of available funds is considered crucial, as the Social Climate Fund is expected not only to fill the gap left by the conclusion of the Recovery and Resilience Facility, but also to act as a safeguard against inflationary pressures in the new energy landscape.