Croatia Launches €1.68 Billion Social Climate Plan 2026-2032: How It Will Protect Vulnerable Households and Small Businesses

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What is the Social Climate Fund?

The Social Climate Fund (SCF) is an EU instrument created in 2023 to ensure that the green transition does not leave anyone behind. Starting from 2026, a new Emissions Trading System (ETS2) will put a price on CO₂ emissions from heating fuels and road transport. This will inevitably increase energy and fuel bills for households and businesses.


To prevent energy poverty and support the most affected citizens, each EU member state must prepare a national Social Climate Plan. Croatia’s plan was approved by the European Commission in late 2025 and will run for seven years (2026–2032).

Key Numbers of Croatia’s Plan

  • Total budget: €1.68 billion
  • EU contribution: approximately €1.43 billion
  • National co-financing: €252 million
  • Expected beneficiaries: over 250,000 vulnerable households and thousands of micro and small enterprises

Main Areas of Support

1. Building Sector (Energy Renovation)

More than 60% of the budget (€1.03 billion) is dedicated to energy renovation of homes:

  • Deep renovation of at least 35,000 privately owned apartments and houses
  • Replacement of old inefficient heating/cooling systems
  • Installation of heat pumps, solar panels and better insulation
  • Subsidies covering up to 80–100% of costs for low-income and energy-poor households

2. Road Transport

€580 million will help people switch to cleaner mobility:

  • Grants for purchasing zero-emission and low-emission vehicles (electric and plug-in hybrids)
  • Support for installation of private and public charging stations
  • Scrappage schemes for old polluting cars
  • Subsidised public transport tickets for vulnerable groups

3. Direct Income Support

A smaller part of the budget will provide temporary direct financial aid (climate bonuses) to the most affected low-income households when ETS2 prices start in 2026–2027.

Who Can Benefit?

The plan explicitly targets:

  • Energy-poor and low-income households (income below 60% of median)
  • Vulnerable transport users (people living in rural or island areas)
  • Micro and small enterprises, especially in tourism and trade

Timeline

  • 2025 – final preparations and calls for renovation contractors
  • 2026 – first calls for citizens and launch of direct support
  • 2027–2032 – main implementation phase

Why This Matters for Croatia and the Planet

Croatia’s building stock is among the least energy-efficient in the EU, and many families still use oil or coal for heating. At the same time, the country wants to cut greenhouse gas emissions by 55% by 2030. The Social Climate Plan makes this dual goal possible: protecting people while accelerating the green transition.

By combining generous subsidies with clear targeting rules, Croatia hopes to avoid the social backlash seen in some other countries when energy prices rise.

This is one of the largest dedicated climate-social programmes in Croatian history and a model of how the EU is trying to make the green transition fair and inclusive.

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