### (50) in order to ensure a smooth start to emissions trading in the buildings and road transport sectors and taking into account the need of the regulated entities to hedge or buy ahead allowances to mitigate their price and liquidity risk , a higher amount of allowances should be auctioned early on. in 2026 , the auction volumes should therefore be 30 % higher than the total quantity of allowances for 2026. this amount would be sufficient to provide liquidity , both if emissions decrease in line with reduction needs , and in the event emission reductions only materialise progressively. the detailed rules for this front-loading of auction volume are to be established in a delegated act related to auctioning , adopted pursuant to article 10(4) of directive 2003/87/ec. ### deleted


### (50) in order to ensure a smooth start to emissions trading in the buildings and road transport sectors and taking into account the need of the regulated entities to hedge or buy ahead allowances to mitigate their price and liquidity risk , a higher amount of allowances should be auctioned early on. in 2026 , the auction volumes should therefore be 30 % higher than the total quantity of allowances for 2026. this amount would be sufficient to provide liquidity , both if emissions decrease in line with reduction needs , and in the event emission reductions only materialise progressively. the detailed rules for this front-loading of auction volume are to be established in a delegated act related to auctioning , adopted pursuant to article 10(4) of directive 2003/87/ec. ### (50) in order to ensure a smooth start to emissions trading in the buildings and road transport sectors and taking into account the need of the regulated entities to hedge or buy ahead allowances to mitigate their price and liquidity risk , a higher amount of allowances should be auctioned early on. in 2025 , the auction volumes should therefore be 30 % higher than the total quantity of allowances for 2025. this amount would be sufficient to provide liquidity , both if emissions decrease in line with reduction needs , and in the event emission reductions only materialise progressively. the detailed rules for this front-loading of auction volume are to be established in a delegated act related to auctioning , adopted pursuant to article 10(4) of directive 2003/87/ec.


### (51) the distribution rules on auction shares are highly relevant for any auction revenues that would accrue to the member states , especially in view of the need to strengthen the ability of the member states to address the social impacts of a carbon price signal in the buildings and road transport sectors. notwithstanding the fact that the two sectors have very different characteristics , it is appropriate to set a common distribution rule similar to the one applicable to stationary installations. the main part of allowances should be distributed among all member states on the basis of the average distribution of the emissions in the sectors covered during the period from 2016 to 2018. ### deleted


### (52) the introduction of the carbon price in road transport and buildings should be accompanied by effective social compensation , especially in view of the already existing levels of energy poverty. about 34 million europeans reported an inability to keep their homes adequately warm in 2018 , and 6 ,9 % of the union population have said that they cannot afford to heat their home sufficiently in a 2019 eu-wide survey60 . to achieve an effective social and distributional compensation , member states should be required to spend the auction revenues on the climate and energy-related purposes already specified for the existing emissions trading , but also for measures added specifically to address related concerns for the new sectors of road transport and buildings , including related policy measures under directive 2012/27/eu of the european parliament and of the council61 . auction revenues should be used to address social aspects of the emission trading for the new sectors with a specific emphasis in vulnerable households , micro-enterprises and transport users. in this spirit , a new social climate fund will provide dedicated funding to member states to support the european citizens most affected or at risk of energy or mobility poverty. this fund will promote fairness and solidarity between and within member states while mitigating the risk of energy and mobility poverty during the transition. it will build on and complement existing solidarity mechanisms. the resources of the new fund will in principle correspond to 25 % of the expected revenues from new emission trading in the period 2026-2032 , and will be implemented on the basis of the social climate plans that member states should put forward under regulation (eu) 20…/nn of the european parliament and the council62 . in addition , each member state should use their auction revenues inter alia to finance a part of the costs of their social climate plans. ### deleted


### (52) the introduction of the carbon price in road transport and buildings should be accompanied by effective social compensation , especially in view of the already existing levels of energy poverty. about 34 million europeans reported an inability to keep their homes adequately warm in 2018 , and 6 ,9 % of the union population have said that they cannot afford to heat their home sufficiently in a 2019 eu-wide survey60 . to achieve an effective social and distributional compensation , member states should be required to spend the auction revenues on the climate and energy-related purposes already specified for the existing emissions trading , but also for measures added specifically to address related concerns for the new sectors of road transport and buildings , including related policy measures under directive 2012/27/eu of the european parliament and of the council61 . auction revenues should be used to address social aspects of the emission trading for the new sectors with a specific emphasis in vulnerable households , micro-enterprises and transport users. in this spirit , a new social climate fund will provide dedicated funding to member states to support the european citizens most affected or at risk of energy or mobility poverty. this fund will promote fairness and solidarity between and within member states while mitigating the risk of energy and mobility poverty during the transition. it will build on and complement existing solidarity mechanisms. the resources of the new fund will in principle correspond to 25 % of the expected revenues from new emission trading in the period 2026-2032 , and will be implemented on the basis of the social climate plans that member states should put forward under regulation (eu) 20…/nn of the european parliament and the council62 . in addition , each member state should use their auction revenues inter alia to finance a part of the costs of their social climate plans. ### (52) the introduction of the carbon price in road transport and buildings should be accompanied by effective social compensation , especially in view of the already existing levels of energy poverty. about 34 million europeans reported an inability to keep their homes adequately warm in 2018 , and 6 ,9 % of the union population have said that they cannot afford to heat their home sufficiently in a 2019 eu-wide survey60 . to achieve an effective social and distributional compensation , member states should be required to spend the auction revenues on the climate and energy-related purposes already specified for the existing emissions trading , but also for measures added specifically to address related concerns for the new sectors of road transport and buildings , including related policy measures under directive 2012/27/eu of the european parliament and of the council61. auction revenues should be used to address social aspects of the emission trading for the new sectors with a specific emphasis in vulnerable households , micro-enterprises and transport users. in this spirit , a new social climate fund will provide dedicated funding to member states to support the european citizens most affected or at risk of energy or mobility poverty. this fund will promote fairness and solidarity between and within member states while mitigating the risk of energy and mobility poverty during the transition. it will build on and complement existing solidarity mechanisms. the resources of the new fund will in principle correspond to at least 25 % of the expected revenues from new emission trading in the period 2025-2031 , and will be implemented on the basis of the social climate plans that member states should put forward under regulation (eu) 20…/nn of the european parliament and the council62 . in addition , each member state should use their auction revenues inter alia to finance a part of the costs of their social climate plans.


### (53) reporting on the use of auctioning revenues should be aligned with the current reporting established by regulation (eu) 2018/1999 of the european parliament and of the council63 . ### deleted


### (54) innovation and development of new low-carbon technologies in the sectors of buildings and road transport are crucial for ensuring the cost-efficient contribution of these sectors to the expected emission reductions. therefore , 150 million allowances from emissions trading in the buildings and road transport sectors should also be made available to the innovation fund to stimulate the cost-efficient emission reductions. ### deleted


### (54) innovation and development of new low-carbon technologies in the sectors of buildings and road transport are crucial for ensuring the cost-efficient contribution of these sectors to the expected emission reductions. therefore , 150 million allowances from emissions trading in the buildings and road transport sectors should also be made available to the innovation fund to stimulate the cost-efficient emission reductions. ### (54) innovation and development of new low-carbon technologies in the sectors of buildings and road transport are crucial for ensuring the cost-efficient contribution of these sectors to the expected emission reductions as well as to reduce the carbon price impact on vulnerable households. therefore , 150 million allowances from emissions trading in the buildings and road transport sectors should also be made available to the union budget specifically to support the social climate fund.


### (55) regulated entities covered by the buildings and road transport emissions trading should surrender allowances for their verified emissions corresponding to the quantities of fuels they have released for consumption. they should surrender allowances for the first time for their verified emissions in 2026. in order to minimise the administrative burden , a number of rules applicable to the existing emissions trading system for stationary installations and aviation should be made applicable to emissions trading for buildings and road transport , with the necessary adaptations. this includes , in particular , rules on transfer , surrender and cancellation of allowances , as well as the rules on the validity of allowances , penalties , competent authorities and reporting obligations of member states. ### deleted


### (55) regulated entities covered by the buildings and road transport emissions trading should surrender allowances for their verified emissions corresponding to the quantities of fuels they have released for consumption. they should surrender allowances for the first time for their verified emissions in 2026. in order to minimise the administrative burden , a number of rules applicable to the existing emissions trading system for stationary installations and aviation should be made applicable to emissions trading for buildings and road transport , with the necessary adaptations. this includes , in particular , rules on transfer , surrender and cancellation of allowances , as well as the rules on the validity of allowances , penalties , competent authorities and reporting obligations of member states. ### (55) regulated entities covered by the buildings and road transport emissions trading should surrender allowances for their verified emissions corresponding to the quantities of fuels they have released for consumption. they should surrender allowances for the first time for their verified emissions in 2025. in order to minimise the administrative burden , a number of rules applicable to the existing emissions trading system for stationary installations and aviation should be made applicable to emissions trading for buildings and road transport , with the necessary adaptations. this includes , in particular , rules on transfer , surrender and cancellation of allowances , as well as the rules on the validity of allowances , penalties , competent authorities and reporting obligations of member states.


### (56) for emissions trading in the buildings and road transport sectors to be effective , it should be possible to monitor emissions with high certainty and at reasonable cost. emissions should be attributed to regulated entities on the basis of fuel quantities released for consumption and combined with an emission factor. regulated entities should be able to reliably and accurately identify and differentiate the sectors in which the fuels are released for consumption , as well as the final users of the fuels , in order to avoid undesirable effects , such as double burden. to have sufficient data to establish the total number of allowances for the period from 2028 to 2030 , the regulated entities holding a permit at the start of the system in 2025 should report their associated historical emissions for 2024. ### deleted


### (57) it is appropriate to introduce measures to address the potential risk of excessive price increases , which , if particularly high at the start of the buildings and road transport emissions trading , may undermine the readiness of households and individuals to invest in reducing their greenhouse gas emissions. these measures should complement the safeguards provided by the market stability reserve established by decision (eu) 2015/1814 of the european parliament and of the council64 and that became operational in 2019. while the market will continue to determine the carbon price , safeguard measures will be triggered by rules-based automatism , whereby allowances will be released from the market stability reserve only if concrete triggering conditions based on the increase in the average allowance price are met. this additional mechanism should also be highly reactive , in order to address excessive volatility due to factors other than changed market fundamentals. the measures should be adapted to different levels of excessive price increase , which will result in different degrees of the intervention. the triggering conditions should be closely monitored by the commission and the measures should be adopted by the commission as a matter of urgency when the conditions are met. this is without prejudice to any accompanying measures that member states may adopt to address adverse social impacts. ### deleted


### (57) it is appropriate to introduce measures to address the potential risk of excessive price increases , which , if particularly high at the start of the buildings and road transport emissions trading , may undermine the readiness of households and individuals to invest in reducing their greenhouse gas emissions. these measures should complement the safeguards provided by the market stability reserve established by decision (eu) 2015/1814 of the european parliament and of the council64 and that became operational in 2019. while the market will continue to determine the carbon price , safeguard measures will be triggered by rules-based automatism , whereby allowances will be released from the market stability reserve only if concrete triggering conditions based on the increase in the average allowance price are met. this additional mechanism should also be highly reactive , in order to address excessive volatility due to factors other than changed market fundamentals. the measures should be adapted to different levels of excessive price increase , which will result in different degrees of the intervention. the triggering conditions should be closely monitored by the commission and the measures should be adopted by the commission as a matter of urgency when the conditions are met. this is without prejudice to any accompanying measures that member states may adopt to address adverse social impacts. ### (57) it is appropriate to introduce measures to address the potential risk of excessive price increases , which , if particularly high at the start of the buildings and road transport emissions trading , may undermine the readiness of households and individuals to invest in reducing their greenhouse gas emissions. these measures should complement the safeguards provided by the market stability reserve established by decision (eu) 2015/1814 of the european parliament and of the council64 and that became operational in 2019. while the market will continue to determine the carbon price , safeguard measures will be triggered by rules-based automatism , whereby allowances will be released from the market stability reserve only if concrete triggering conditions based on the average allowance price are met. this additional mechanism should also be highly reactive , in order to address excessive volatility due to factors other than changed market fundamentals. since the measures should guarantee that the price does not initially reach levels that the social climate fund cannot compensate vulnerable households for , a temporary price corridor is needed. the triggering conditions should be closely monitored by the commission and the measures should be adopted by the commission as a matter of urgency when the conditions are met. this is without prejudice to any accompanying measures that member states may adopt to address adverse social impacts. after 2030 , an updated mechanism , based on market pricing and which avoids price volatility and threshold effects , should , where appropriate , be proposed by the commission by means of a legislative proposal.


### (58) the application of emissions trading in the buildings and road transport sectors should be monitored by the commission , including the degree of price convergence with the existing ets , and , if necessary , a review should be proposed to the european parliament and the council to improve the effectiveness , administration and practical application of emissions trading for those sectors on the basis of acquired knowledge as well as increased price convergence. the commission should be required to submit the first report on those matters by 1 january 2028. ### deleted


### (58) the application of emissions trading in the buildings and road transport sectors should be monitored by the commission , including the degree of price convergence with the existing ets , and , if necessary , a review should be proposed to the european parliament and the council to improve the effectiveness , administration and practical application of emissions trading for those sectors on the basis of acquired knowledge as well as increased price convergence. the commission should be required to submit the first report on those matters by 1 january 2028. ### (58) the application of emissions trading in the buildings and road transport sectors should be monitored by the commission , including the degree of price convergence with the existing ets , and , if necessary , a review should be proposed to the european parliament and the council to improve the effectiveness , administration and practical application of emissions trading for those sectors on the basis of acquired knowledge as well as increased price convergence. the commission should be required to submit the first report on those matters by 1 january 2028. however , the systems are and should remain separate.


### (59) in order to ensure uniform conditions for the implementation of articles 3gd(3) , 12(3b) and 14(1) of directive 2003/87/ec , implementing powers should be conferred on the commission. to ensure synergies with the existing regulatory framework , the conferral of implementing powers in articles 14 and 15 of that directive should be extended to cover the sectors of road transport and buildings. those implementing powers should be exercised in accordance with regulation (eu) no 182/2011 of the european parliament and of the council65 . ### deleted


### (60) in order to adopt non-legislative acts of general application to supplement or amend certain non-essential elements of a legislative act , the power to adopt acts in accordance with article 290 of the treaty on the functioning of the european union should be delegated to the commission in respect of articles 10(4) and 10a(8) of that directive. moreover , to ensure synergies with the existing regulatory framework , the delegation in articles 10(4) and 10a(8) of directive 2003/87/ec should be extended to cover the sectors of road transport and buildings. it is of particular importance that the commission carry out appropriate consultations during its preparatory work , including at expert level , and that those consultations be conducted in accordance with the principles laid down in the interinstitutional agreement on better law-making of 13 april 2016. in particular , to ensure equal participation in the preparation of delegated acts , the european parliament and the council receive all documents at the same time as member states' experts , and their experts systematically have access to meetings of commission expert groups dealing with the preparation of delegated acts. in accordance with the joint political declaration of 28 september 2011 of member states and the commission on explanatory documents66 , member states have undertaken to accompany , in justified cases , the notification of their transposition measures with one or more documents explaining the relationship between the components of a directive and the corresponding parts of national transposition instruments. with regard to this directive , the legislator considers the transmission of such documents to be justified ### deleted


### 1. this directive shall apply to the activities listed in annexes i and iii , and to the of greenhouse gases listed in annex ii. where an installation that is included in the scope of the eu ets due to the operation of combustion units with a total rated thermal input exceeding 20 mw changes its production processes to reduce its greenhouse gas emissions and no longer meets that threshold , it shall remain in the scope of the eu ets until the end of the relevant five year period referred to in article 11(1) , second subparagraph , following the change to its production process. ### 1. this directive shall apply to the activities listed in annexes i and iii , and to the of greenhouse gases listed in annex ii. where an installation that is included in the scope of the eu ets due to the operation of combustion units with a total rated thermal input exceeding 10 mw changes its production processes to reduce its greenhouse gas emissions and no longer meets that threshold , it shall remain in the scope of the eu ets until the end of the relevant five year period referred to in article 11(1) , second subparagraph , following the change to its production process.


### in addition , 2 ,5 % of the total quantity of allowances between [year following the entry into force of the directive] and 2030 shall be auctioned for the modernisation fund. the beneficiary member states for this amount of allowances shall be the member states with a gdp per capita at market prices below 65 % of the union average during the period 2016 to 2018. the funds corresponding to this quantity of allowances shall be distributed in accordance with part b of annex iib. ### in addition , 1 ,25 % of the total quantity of allowances between [year following the entry into force of the directive] and 2030 shall be auctioned for the modernisation fund. the beneficiary member states for this amount of allowances shall be the member states with a gdp per capita at market prices below 65 % of the union average during the period 2016 to 2018. the funds corresponding to this quantity of allowances shall be distributed in accordance with part b of annex iib.


### 3. member states shall determine the use of revenues generated from the auctioning of allowances , except for the revenues established as own resources in accordance with article 311(3) tfeu and entered in the union budget. member states shall use their revenues generated from the auctioning of allowances referred to in paragraph 2 , with the exception of the revenues used for the compensation of indirect carbon costs referred to in article 10a(6) , for one or more of the following:; ### 3. member states shall determine the use of revenues generated from the auctioning of allowances , except for the revenues established as own resources in accordance with article 311(3) tfeu and entered in the union budget in order to support the social climate fund under regulation (eu) .../... [social climate fund regulation]. member states shall use their revenues generated from the auctioning of allowances referred to in paragraph 2 for one or more of the following:;


### in the case of installations covered by the obligation to conduct an energy audit under article 8(4) of directive 2012/27/eu of the european parliament and of the council(*) [article reference to be updated with the revised directive] , free allocation shall only be granted fully if the recommendations of the audit report are implemented , to the extent that the pay-back time for the relevant investments does not exceed five years and that the costs of those investments are proportionate. otherwise , the amount of free allocation shall be reduced by 25 %. the amount of free allocation shall not be reduced if an operator demonstrates that it has implemented other measures which lead to greenhouse gas emission reductions equivalent to those recommended by the audit report. the measures referred to in the first subparagraph shall be adjusted accordingly. ### in the case of installations covered by the obligation to conduct an energy audit under article 8(4) of directive 2012/27/eu of the european parliament and of the council(*) [article reference to be updated with the revised directive] , free allocation shall not be granted fully if the recommendations of the audit report are not implemented , to the extent that the pay-back time for the relevant investments does not exceed five years and that the costs of those investments are proportionate. otherwise , the amount of free allocation shall be reduced by 50 %. the amount of free allocation shall not be reduced if an operator demonstrates that it has implemented other measures which lead to greenhouse gas emission reductions equivalent to those recommended by the audit report. the measures referred to in the first subparagraph shall be adjusted accordingly.


### in the case of installations covered by the obligation to conduct an energy audit under article 8(4) of directive 2012/27/eu of the european parliament and of the council(*) [article reference to be updated with the revised directive] , free allocation shall only be granted fully if the recommendations of the audit report are implemented , to the extent that the pay-back time for the relevant investments does not exceed five years and that the costs of those investments are proportionate. otherwise , the amount of free allocation shall be reduced by 25 %. the amount of free allocation shall not be reduced if an operator demonstrates that it has implemented other measures which lead to greenhouse gas emission reductions equivalent to those recommended by the audit report. the measures referred to in the first subparagraph shall be adjusted accordingly. ### "in the case of installations covered by the obligation to conduct an energy audit under article 8(4) of directive 2012/27/eu of the european parliament and of the council(*) [article reference to be updated with the revised directive] , free allocation shall only be granted fully if the recommendations of the audit report are implemented , to the extent that the pay-back time for the relevant investments does not exceed three years and that the costs of those investments are proportionate. otherwise , the amount of free allocation shall be reduced by a maximum of 25 % , percentage that can be reduced in proportion to the recommendations that have been implemented. the amount of free allocation shall not be reduced if an operator demonstrates that it has implemented other measures which lead to greenhouse gas emission reductions equivalent to the measures recommended by the audit report , or if the operator demonstrates that it has implemented across its combined installations measures that lead to greenhouse gas emission reductions equivalent to the measures recommended by the audit report of each of its installations. the measures referred to in the first subparagraph shall be adjusted accordingly.


### in the case of installations covered by the obligation to conduct an energy audit under article 8(4) of directive 2012/27/eu of the european parliament and of the council(*) [article reference to be updated with the revised directive] , free allocation shall only be granted fully if the recommendations of the audit report are implemented , to the extent that the pay-back time for the relevant investments does not exceed five years and that the costs of those investments are proportionate. otherwise , the amount of free allocation shall be reduced by 25 %. the amount of free allocation shall not be reduced if an operator demonstrates that it has implemented other measures which lead to greenhouse gas emission reductions equivalent to those recommended by the audit report. the measures referred to in the first subparagraph shall be adjusted accordingly. ### in the case of installations covered by the obligation to conduct an energy audit under article 8(4) of directive 2012/27/eu of the european parliament and of the council(*) [article reference to be updated with the revised directive] , free allocation shall only be granted fully if the recommendations of the audit report are implemented , to the extent that the pay-back time for the relevant investments does not exceed five years and that the costs of those investments are proportionate. otherwise , the amount of free allocation shall be reduced by 100 %. the amount of free allocation shall not be reduced if an operator demonstrates that it has implemented other measures which lead to greenhouse gas emission reductions equivalent to those recommended by the audit report. the measures referred to in the first subparagraph shall be adjusted accordingly.


### no free allocation shall be given to installations in sectors or subsectors to the extent they are covered by other measures to address the risk of carbon leakage as established by regulation (eu) …./.. [reference to cbam](**). the measures referred to in the first subparagraph shall be adjusted accordingly ### free allocation given to installations in sectors or subsectors covered by other measures to address the risk of carbon leakage as established by regulation (eu) …./.. [reference to cbam](**) shall be gradually reduced , not earlier than 2030 and once cbam has fully demonstrated its effectiveness in equalising co2 costs between imported and domestic products. the measures referred to in the first subparagraph shall be adjusted accordingly.


### no free allocation shall be given to installations in sectors or subsectors to the extent they are covered by other measures to address the risk of carbon leakage as established by regulation (eu) …./.. [reference to cbam](**). the measures referred to in the first subparagraph shall be adjusted accordingly ### free allocation given to installations in sectors or subsectors covered by other measures to address the risk of carbon leakage as established by regulation (eu) …./.. [reference to cbam](**) shall be gradually reduced , not earlier than 2030 and once cbam has fully demonstrated its effectiveness in equalising co2 costs between imported and domestic products. the measures referred to in the first subparagraph shall be adjusted accordingly


### no free allocation shall be given in relation to the production of products listed in annex i of regulation [cbam] as from the date of application of the carbon border adjustment mechanism. ### free allocation given in relation to the production of products listed in annex i of regulation [cbam] shall be gradually reduced , once cbam has fully demonstrated its effectiveness in equalising co2 costs between imported and domestic products , at which point a factor reducing the free allocation for the production of these products shall be applied (cbam factor).


### by way of derogation from the previous subparagraph , for the first years of operation of regulation [cbam] , the production of these products shall benefit from free allocation in reduced amounts. a factor reducing the free allocation for the production of these products shall be applied (cbam factor). the cbam factor shall be equal to 100 % for the period during the entry into force of [cbam regulation] and the end of 2025 , 90 % in 2026 and shall be reduced by 10 percentage points each year to reach 0 % by the tenth year. ### the cbam factor shall be equal to 100 % for the period during the entry into force of [cbam regulation]. once cbam has fully demonstrated its effectiveness in equalising co2 costs between imported and domestic products and in protecting the competitiveness of european exports , and not earlier than 2030 , the cbam factor shall be equal to 90 % in [xxx – date at which the cbam fully equalises co2 costs] and shall be reduced by 10 percentage points each year to reach 0 % by the tenth year. the cbam factor shall be equal to 100 % for exports outside of the eu , until a wto-compatible export solution measure equalising co2 costs has been implemented upon a proposal by the commission. the cbam factor shall be adjusted to take into account existing carbon pricing schemes in third countries.


### by way of derogation from the previous subparagraph , for the first years of operation of regulation [cbam] , the production of these products shall benefit from free allocation in reduced amounts. a factor reducing the free allocation for the production of these products shall be applied (cbam factor). the cbam factor shall be equal to 100 % for the period during the entry into force of [cbam regulation] and the end of 2025 , 90 % in 2026 and shall be reduced by 10 percentage points each year to reach 0 % by the tenth year. ### by way of derogation from the previous subparagraph , for the first years of operation of regulation [cbam] , the production of these products shall benefit from free allocation in reduced amounts. a factor reducing the free allocation for the production of these products shall be applied (cbam factor). the cbam factor shall be equal to 100 % for the period between the entry into force of [cbam regulation] and 31 december 2024 , 90 % in 2025 , 70 % in 2026 , 40 % in 2027 , and shall reach 0 % by the end of 2028.


### allowances resulting from the reduction of free allocation shall be made available to support innovation in accordance with article 10a(8).; ### 50 % of the allowances resulting from the reduction of free allocation shall be made available to support innovation in accordance with article 10a(8). the other 50 % of those allowances shall be auctioned by the commission pursuant to article 10(4) and the revenues generated from the auctioning shall be transferred to the union budget.;


### 365 million allowances from the quantity which could otherwise be allocated for free pursuant to this article , and 85 million allowances from the quantity which could otherwise be auctioned pursuant to article 10 , as well as the allowances resulting from the reduction of free allocation referred to in article 10a(1a) , shall be made available to a fund with the objective of supporting innovation in low-carbon technologies and processes , and contribute to zero pollution objectives (the ‘innovation fund’). allowances that are not issued to aircraft operators due to the closure of aircraft operators and which are not necessary to cover any shortfall in surrenders by those operators , shall also be used for innovation support as referred to in the first subparagraph. ### 365 million allowances from the quantity which could otherwise be allocated for free pursuant to this article , and 85 million allowances from the quantity which could otherwise be auctioned pursuant to article 10 , as well as the allowances resulting from the reduction of free allocation referred to in article 10a(1a) , shall be made available to a fund with the objective of supporting innovation in low-carbon technologies and processes , and contribute to zero pollution objectives (the ‘innovation fund’). to foster innovation in breakthrough technologies as soon as possible , the commission should ensure that the financing made available through the innovation fund is ‘frontloaded’ during the first years of implementation of this directive. allowances that are not issued to aircraft operators due to the closure of aircraft operators and which are not necessary to cover any shortfall in surrenders by those operators , shall also be used for innovation support as referred to in the first subparagraph.


### 365 million allowances from the quantity which could otherwise be allocated for free pursuant to this article , and 85 million allowances from the quantity which could otherwise be auctioned pursuant to article 10 , as well as the allowances resulting from the reduction of free allocation referred to in article 10a(1a) , shall be made available to a fund with the objective of supporting innovation in low-carbon technologies and processes , and contribute to zero pollution objectives (the ‘innovation fund’). allowances that are not issued to aircraft operators due to the closure of aircraft operators and which are not necessary to cover any shortfall in surrenders by those operators , shall also be used for innovation support as referred to in the first subparagraph. ### 375 million allowances from the quantity which could otherwise be allocated for free pursuant to this article , and 75 million allowances from the quantity which could otherwise be auctioned pursuant to article 10 ,as well as the allowances resulting from the reduction of free allocation referred to in article 10a(1a) , shall be made available to a fund with the objective of supporting innovation in zero-carbon technologies and processes , and contribute to zero pollution objectives (the ‘innovation fund’) while not supporting nuclear energy. allowances that are not issued to aircraft operators due to the closure of aircraft operators and which are not necessary to cover any shortfall in surrenders by those operators , shall also be used for innovation support as referred to in the first subparagraph.


### the innovation fund shall cover the sectors listed in annex i and annex iii , including environmentally safe carbon capture and utilisation (“ccu”) that contributes substantially to mitigating climate change , as well as products substituting carbon intensive ones produced in sectors listed in annex i , and to help stimulate the construction and operation of projects aimed at the environmentally safe capture and geological storage (“ccs”) of co2 , as well as of innovative renewable energy and energy storage technologies; in geographically balanced locations. the innovation fund may also support break-through innovative technologies and infrastructure to decarbonise the maritime sector and for the production of low- and zero-carbon fuels in aviation , rail and road transport. special attention shall be given to projects in sectors covered by the [cbam regulation] to support innovation in low carbon technologies , ccu , ccs , renewable energy and energy storage , in a way that contributes to mitigating climate change. ### the innovation fund shall cover the sectors listed in annex i and annex iii , including environmentally safe carbon capture and utilisation (“ccu”) that contributes substantially to mitigating climate change , as well as products substituting carbon intensive ones produced in sectors listed in annex i , and to help stimulate the construction and operation of projects aimed at the environmentally safe capture and geological storage (“ccs”) of co2 , as well as of innovative renewable energy and energy storage technologies; in geographically balanced locations. the innovation fund may also support break-through innovative technologies and infrastructure to decarbonise the maritime sector and for the production of low- and zero-carbon fuels in aviation , rail and road transport. special attention shall be given to projects in sectors covered by the [cbam regulation] to support innovation in low carbon technologies , ccu , ccs , renewable energy and energy storage , in a way that contributes to mitigating climate change and a just transition and delivers the most marginal benefit in terms of emission reductions per support provided. the innovation fund shall also support the deployment of technologies that may no longer be considered innovative , but nevertheless hold a significant abatement potential and contribute to decarbonisation of the economy and energy and resource savings.


### the commission is empowered to adopt delegated acts in accordance with article 23 to supplement this directive concerning rules on the operation of the innovation fund , including the selection procedure and criteria , and the eligible sectors and technological requirements for the different types of support. ### the commission is empowered to adopt delegated acts in accordance with article 23 to supplement this directive concerning rules on the operation of the innovation fund , including the selection procedure and criteria , and the eligible sectors and technological requirements for the different types of support taking into account the social dimension of projects to ensure that the innovation fund contributes to a just transition for workers and communities impacted the range of measures that the innovation fund supports shall be extended to cover support to projects through price-competitive tendering , such as carbon contracts for difference (ccds).


### the investments supported shall be consistent with the aims of this directive , as well as the objectives of the communication from the commission of 11 december 2019 on the european green deal (*) and regulation (eu) 2021/1119 of the european parliament and of the council (**) and the long-term objectives as expressed in the paris agreement. no support from the modernisation fund shall be provided to energy generation facilities that use fossil fuels.”; ### the investments supported shall be consistent with the aims of this directive , as well as the objectives of the communication from the commission of 11 december 2019 on the european green deal (*) and regulation (eu) 2021/1119 of the european parliament and of the council (**) and the long-term objectives as expressed in the paris agreement. no support from the modernisation fund shall be provided to nuclear energy or energy generation facilities that use fossil fuels.”;


### 2. at least 80 % of the financial resources from the modernisation fund shall be used to support investments in the following: ### 2. 100 % of the financial resources from the modernisation fund shall be used to support investments in the following:


### the improvement of demand side energy efficiency , including in transport , buildings , agriculture and waste; ### the reduction of overall energy use through demand side management and energy efficiency , including in transport , buildings , agriculture and waste;


### a just transition in carbon-dependent regions in the beneficiary member states , so as to support the redeployment , re-skilling and up-skilling of workers , education , job-seeking initiatives and start-ups , in dialogue with the social partners.; ### a just transition in carbon-dependent regions in the beneficiary member states , so as to support the redeployment , re-skilling and up-skilling of workers , education , job-seeking initiatives and start-ups , in dialogue with civil society and social partners , in compliance with the eligibility criteria for activities in articles 8 and 9 of regulation (eu) 2021/1056 and in line with the territorial just transition plans where relevant.;


### in order to provide further incentives for reducing greenhouse gas emissions and improving energy efficiency , the determined union-wide ex-ante benchmarks shall be reviewed before the period from 2026 to 2030 in view of potentially modifying the definitions and system boundaries of existing product benchmarks.; ### in order to provide further incentives for reducing greenhouse gas emissions and improving energy efficiency , the determined union-wide ex-ante benchmarks shall be reviewed by … [6 months after the date of the entry into force of this directive] in view of modifying the definitions , scope and system boundaries of existing product benchmarks and potentially including new benchmarks ensuring free allocation for the production of a product is independent the type of production process , accounts for the full potential of product substitution and the circular use of materials , or avoids installations with partially or fully decarbonised processes being excluded from or prevented from participating in the benchmarks. the benchmark values resulting from that review shall be published as soon as the necessary information becomes available , in order for the updates to apply as soon as possible but no later than 1 january 2026.;


### in order to provide further incentives for reducing greenhouse gas emissions and improving energy efficiency , the determined union-wide ex-ante benchmarks shall be reviewed before the period from 2026 to 2030 in view of potentially modifying the definitions and system boundaries of existing product benchmarks.; ### in order to provide further incentives for reducing greenhouse gas emissions and improving energy efficiency , the determined union-wide ex-ante benchmarks shall be reviewed by … [6 months after the date of the entry into force of this directive] in view of modifying the definitions , scope and system boundaries of existing product benchmarks and potentially including new benchmarks ensuring free allocation for the production of a product is independent the type of production process , accounts for the full potential of product substitution and the circular use of materials , or avoids installations with partially or fully decarbonised processes being excluded from or prevented from participating in the benchmarks. within the review , a linear benchmark trajectory shall be taken into consideration. this linear trajectory shall be in line with eu-wide climate neutrality by 2050 at the latest , and climate neutrality of the installations covered by this directive by 2045 at the latest. the benchmark values resulting from that review shall be published as soon as the necessary information becomes available , in order for the updates to apply as soon as possible but no later than 1 january 2026.;


### where the annual reduction rate exceeds 2 ,5 % or is below 0 ,2 % , the benchmark values for the period from 2026 to 2030 shall be the benchmark values applicable in the period from 2013 to 2020 reduced by whichever of those two percentage rates is relevant , in respect of each year between 2008 and 2028.; ### where the annual reduction rate exceeds 2 ,5 % or is below 1 % , the benchmark values for the period from 2026 to 2030 shall be the benchmark values applicable in the period from 2013 to 2020 reduced by whichever of those two percentage rates is relevant , in respect of each year between 2008 and 2028.;


### paragraphs 3 and 4 are deleted; ### paragraphs 3 , 4 and 6 are deleted;


### in paragraph 6 , the first subparagraph is replaced by the following: ### deleted


### measures intended to improve energy efficiency , district heating systems and insulation , or to provide financial support in order to address social aspects in lower- and middle-income households , including by reducing distortive taxes;; ### measures intended to improve energy efficiency , district heating systems and insulation , efficient and renewable heating and cooling systems , or to provide financial support in order to address social aspects in lower- and middle-income households , including by reducing distortive taxes , provided such reduction is carried out in a progressive manner;


### (62) considering the need to deliver a stronger investment signal to reduce emissions in a cost-efficient manner and with a view to strengthening the eu ets , decision (eu) 2015/1814 should be amended so as to increase the percentage rate for determining the number of allowances to be placed each year in the market stability reserve. in addition , for lower levels of the tnac , the intake should be equal to the difference between the tnac and the threshold that determines the intake of allowances. this would prevent the considerable uncertainty in the auction volumes that results when the tnac is close to the threshold , and at the same time ensure that the surplus reaches the volume bandwidth within which the carbon market is deemed to operate in a balanced manner. ### (62) considering the need to deliver a stronger investment signal to reduce emissions in a cost-efficient manner and with a view to strengthening the eu ets , decision (eu) 2015/1814 should be amended so as to increase the percentage rate for determining the number of allowances to be placed each year in the market stability reserve. in addition , for lower levels of the tnac , the intake should be equal to the difference between the tnac and the threshold that determines the intake of allowances. this would prevent the considerable uncertainty in the auction volumes that results when the tnac is close to the threshold , and at the same time ensure that the surplus reaches the volume bandwidth within which the carbon market is deemed to operate in a balanced manner. such adjustment should be made without resulting in any reduced ambition compared to the current market stability reserve.


### (67) it is necessary to amend regulation (eu) 2015/757 to take into account the inclusion of the maritime transport sector in the eu ets. regulation (eu) 2015/757 should be amended to oblige companies to report aggregated emissions data at company level and to submit for approval their verified monitoring plans and aggregated emissions data at company level to the responsible administering authority. in addition , the commission should be empowered to adopt delegated acts to amend the methods for monitoring co2 emissions and the rules on monitoring , as well as any other relevant information set out in regulation (eu) 2015/757 , to ensure the effective functioning of the eu ets at administrative level and to supplement regulation (eu) 2015/757 with the rules for the approval of monitoring plans and changes thereof by administering authorities , with the rules for the monitoring , reporting and submission of the aggregated emissions data at company level and with the rules for the verification of the aggregated emissions data at company level and for the issuance of a verification report in respect of the aggregated emissions data at company level. the data monitored , reported and verified under regulation (eu) 2015/757 might also be used for the purpose of compliance with other union law requiring the monitoring , reporting and verification of the same ship information. ### (67) it is necessary to amend regulation (eu) 2015/757 to take into account the inclusion of the maritime transport sector in the eu ets. regulation (eu) 2015/757 should be amended to oblige companies to report aggregated emissions data at company level and to submit for approval their verified monitoring plans and aggregated emissions data at company level to the responsible administering authority. in addition , the commission should be empowered to adopt delegated acts to amend the methods for monitoring greenhouse gas emissions and the rules on monitoring , as well as any other relevant information set out in regulation (eu) 2015/757 , to ensure the effective functioning of the eu ets at administrative level and to supplement regulation (eu) 2015/757 with the rules for the approval of monitoring plans and changes thereof by administering authorities , with the rules for the monitoring , reporting and submission of the aggregated emissions data at company level and with the rules for the verification of the aggregated emissions data at company level and for the issuance of a verification report in respect of the aggregated emissions data at company level. the data monitored , reported and verified under regulation (eu) 2015/757 might also be used for the purpose of compliance with other union law requiring the monitoring , reporting and verification of the same ship information.


### ‘emissions’ means the release of greenhouse gases from sources in an installation or the release from an aircraft performing an aviation activity listed in annex i or from ships performing a maritime transport activity listed in annex i of the gases specified in respect of that activity , or the release of greenhouse gases corresponding to the activity referred to in annex iii;; ### ‘emissions’ means the release of greenhouse gases into the atmosphere from sources in an installation or the release from an aircraft performing an aviation activity listed in annex i or from ships performing a maritime transport activity listed in annex i of the gases specified in respect of that activity , or the release of greenhouse gases corresponding to the activity referred to in annex iii;;


### ‘emissions’ means the release of greenhouse gases from sources in an installation or the release from an aircraft performing an aviation activity listed in annex i or from ships performing a maritime transport activity listed in annex i of the gases specified in respect of that activity , or the release of greenhouse gases corresponding to the activity referred to in annex iii;; ### ‘emissions’ means the release of greenhouse gases into the atmosphere from sources in an installation or the release from an aircraft performing an aviation activity listed in annex i or from ships performing a maritime transport activity listed in annex i of the gases specified in respect of that activity , or the release of greenhouse gases corresponding to the activity referred to in annex iii;";


### 6. salutes that the agency has continued to successfully deliver its tasks in the field of eu rail interoperability , safety and harmonisation; welcomes the continuous commitment from the agency to the objective of creating a single european railway area; ### 6. salutes that the agency has continued to successfully deliver its tasks in the field of eu rail interoperability , safety and harmonisation; welcomes the continuous commitment from the agency to the objective of creating a single european railway area and for improving rail transport connectivity;


### 7. welcomes the fact that , despite the covid-19 crisis , the programme has entered its delivery phase with 107 demonstrators at completion , 30% completed in 2021 and above 80% of deliverables achieved by end 2021; notes however that delays of 6.5 months on average are expected for one fourth of the demonstrators; ### 7. welcomes the fact that , despite the covid-19 crisis , the programme has entered its delivery phase with 107 demonstrators at completion , 30% completed in 2021 and above 80% of deliverables achieved by end 2021; notes however that delays of 6.5 months on average are expected for one fourth of the demonstrators; suggests that necessary and effective measures should be taken in the future to avoid such delays;


### (8) those amendments have differing economic and social impacts on the different sectors of the economy , on the citizens , and the member states. in particular , the inclusion of greenhouse gas emissions from buildings and road transport into the scope of directive 2003/87/ec of the european parliament and the council31should provide an additional economic incentive to invest into the reduction of fossil fuel consumption and thereby accelerate the reduction of greenhouse gas emissions. combined with other measures , this should , in the medium to long term , reduce the costs for buildings and road transport , and provide new opportunities for job creation and investment. ### (8) those amendments have differing economic and social impacts on the different sectors of the economy , on the citizens , and the member states. in particular , the inclusion of greenhouse gas emissions from buildings and road transport into the scope of directive 2003/87/ec of the european parliament and the council31 should provide an additional economic incentive , on top of the economic incentive from the other ghg emitting sectors , to invest into the reduction of fossil fuel consumption and thereby accelerate the reduction of greenhouse gas emissions. combined with other measures to make this scf sustainable over time , and the proposals resulting from the negotiations on the future revision of the energy performance of buildings directive , this should , in the medium to long term , reduce the costs for buildings and road transport , increase the energy sustainability of buildings by reducing their energy demand and thus their ghg emissions , and provide new opportunities for job creation and investment.


### (8) those amendments have differing economic and social impacts on the different sectors of the economy , on the citizens , and the member states. in particular , the inclusion of greenhouse gas emissions from buildings and road transport into the scope of directive 2003/87/ec of the european parliament and the council31 should provide an additional economic incentive to invest into the reduction of fossil fuel consumption and thereby accelerate the reduction of greenhouse gas emissions. combined with other measures , this should , in the medium to long term , reduce the costs for buildings and road transport , and provide new opportunities for job creation and investment. ### (8) those amendments have differing economic and social impacts on the different sectors of the economy , on the citizens , and the member states. in particular , the inclusion of greenhouse gas emissions from buildings and road transport into the scope of directive 2003/87/ec of the european parliament and the council31 should provide an additional economic incentive to invest into the reduction of fossil fuel consumption and thereby accelerate the reduction of greenhouse gas emissions from these sectors. combined with other measures , this should , in the medium to long term , reduce the costs for buildings and road transport , and provide new opportunities for job creation and investment.


### (9) however , resources are needed to finance those investments. in addition , before they have taken place , the cost supported by households and transport users for heating , cooling and cooking , as well as for road transport , is likely to increase as fuel suppliers subject to the obligations under the emission trading for buildings and road transport pass on costs on carbon to the consumers. ### (9) however , sufficient , stable and equitable resources are needed to finance those investments. in addition , before they have taken place , the cost supported by households and transport users for heating , cooling and cooking , as well as for road transport , is likely to increase as fuel suppliers subject to the obligations under the emission trading for buildings and road transport pass on costs on carbon to the consumers.


### (9) however , resources are needed to finance those investments. in addition , before they have taken place , the cost supported by households and transport users for heating , cooling and cooking , as well as for road transport , is likely to increase as fuel suppliers subject to the obligations under the emission trading for buildings and road transport pass on costs on carbon to the consumers. ### (9) however , resources are needed to finance those investments. in addition , before they have taken place , the cost supported by local and regional governments , households and transport users for heating , cooling and cooking , as well as for road transport , is likely to increase as fuel suppliers subject to the obligations under the emission trading for buildings and road transport pass on costs on carbon to the consumers.


### (10) the increase in the price for fossil fuels may disproportionally affect vulnerable households , vulnerable micro-enterprises and vulnerable transport users who spend a larger part of their incomes on energy and transport , who , in certain regions , do not have access to alternative , affordable mobility and transport solutions and who may lack the financial capacity to invest into the reduction of fossil fuel consumption. ### (10) the increase in the price for fossil fuels may disproportionally affect vulnerable households , vulnerable micro-enterprises and vulnerable transport users who spend a larger part of their incomes on energy and transport , who , in certain regions , in particular , insular , peripheral , remote and rural regions , do not have access to alternative , affordable mobility and transport solutions and who may lack the financial capacity to invest into the reduction of fossil fuel consumption.


### (10) the increase in the price for fossil fuels may disproportionally affect vulnerable households , vulnerable micro-enterprises and vulnerable transport users who spend a larger part of their incomes on energy and transport , who , in certain regions , do not have access to alternative , affordable mobility and transport solutions and who may lack the financial capacity to invest into the reduction of fossil fuel consumption. ### (10) the increase in the price for fossil fuels may disproportionally affect vulnerable households , vulnerable micro-enterprises and vulnerable transport users who spend a larger part of their incomes on energy and transport , who , in certain regions , including in rural , insular , mountainous , remote , sparsely populated and less accessible areas or for less developed regions or territories , including less developed peri-urban areas , do not have access to alternative , affordable mobility and transport solutions and who may lack the financial capacity to invest into the reduction of fossil fuel consumption. , as well as local and regional governments who may lack the financial capacity to invest in energy efficient public building and social housing and clean and affordable public transports.


### (10) the increase in the price for fossil fuels may disproportionally affect vulnerable households , vulnerable micro-enterprises and vulnerable transport users who spend a larger part of their incomes on energy and transport , who , in certain regions , do not have access to alternative , affordable mobility and transport solutions and who may lack the financial capacity to invest into the reduction of fossil fuel consumption. ### (10) the increase in the price for fossil fuels may disproportionally affect vulnerable households , vulnerable micro-enterprises and smes and vulnerable transport users who spend a larger part of their incomes on energy and transport , thus exacerbating inequalities , and who , in certain regions , especially in rural , peripheral and isolated areas , in less developed regions or territories , those suffering from severe handicaps and those in demographic decline , do not have access to alternative , affordable mobility and transport solutions and who may lack the financial capacity to invest into the reduction of fossil fuel consumption.


### (10) the increase in the price for fossil fuels may disproportionally affect vulnerable households , vulnerable micro-enterprises and vulnerable transport users who spend a larger part of their incomes on energy and transport , who , in certain regions , do not have access to alternative , affordable mobility and transport solutions and who may lack the financial capacity to invest into the reduction of fossil fuel consumption. ### (10) the increase in the price for fossil fuels may disproportionally affect vulnerable households , self employed vulnerable micro-enterprises and vulnerable transport users who spend a larger part of their incomes on energy and transport , who , in certain regions , do not have access to alternative , affordable mobility and transport solutions and who may lack the financial capacity to invest into the reduction of fossil fuel consumption.


### (10) the increase in the price for fossil fuels may disproportionally affect vulnerable households , vulnerable micro-enterprises and vulnerable transport users who spend a larger part of their incomes on energy and transport , who , in certain regions , do not have access to alternative , affordable mobility and transport solutions and who may lack the financial capacity to invest into the reduction of fossil fuel consumption. ### (10) the increase in the price for fossil fuels may disproportionally affect vulnerable households , vulnerable micro-enterprises and vulnerable transport users who spend a larger part of their incomes on energy and transport , who , in certain regions in particular , insular , peripheral , remote and rural regions , do not have access to alternative , affordable mobility and transport solutions and who may lack the financial capacity to invest into the reduction of fossil fuel consumption.


### (10) the increase in the price for fossil fuels may disproportionally affect vulnerable households , vulnerable micro-enterprises and vulnerable transport users who spend a larger part of their incomes on energy and transport , who , in certain regions , do not have access to alternative , affordable mobility and transport solutions and who may lack the financial capacity to invest into the reduction of fossil fuel consumption. ### (10) the increase in the price for fossil fuels may disproportionally affect vulnerable households , vulnerable micro-enterprises , vulnerable smes and vulnerable transport users who spend a larger part of their incomes on energy and transport , thus exacerbating inequalities , and who , in certain regions , especially in rural , peripheral and isolated areas , in less developed regions or territories , those suffering from severe handicaps and those in demographic decline , do not have access to alternative , affordable mobility and transport solutions and who may lack the financial capacity to invest into the reduction of fossil fuel consumption.


### (11) therefore , a part of the revenues generated by the inclusion of building and road transport into the scope of directive 2003/87/ec should be used to address the social impacts arising from that inclusion , for the transition to be just and inclusive , leaving no one behind. ### (11) therefore , a part of the revenues generated by the inclusion of building and road transport into the scope of directive 2003/87/ec should be used as an own resource to finance the union budget as general income , in accordance with the legally binding interinstitutional agreement of 16 december 20201a that sets out a roadmap towards the introduction of new own resources , providing the union budget with the means to contribute to addressing the social impacts arising from that inclusion , for the transition to be just and inclusive , leaving no one behind. under that agreement , a basket of new own resources is envisaged to be introduced by 1 january 2023. the new own resources are instruments to embed eu policy priorities such as the european green deal and the union’s contribution to fair taxation in the revenue side of the eu budget and thus augment eu add value. as such , green own resources are to contribute to the climate mainstreaming objectives , the repayment of ngeu debts and the resilience of the union budget as regards its functioning as a tool for investments and guarantees.


### (13) a social climate (‘the fund’) should therefore be established to provide funds to the member states to support their policies to address the social impacts of the emissions trading for buildings and road transport on vulnerable households , vulnerable micro-enterprises and vulnerable transport users. this should be achieved notably through temporary income support and measures and investments intended to reduce reliance on fossil fuels through increased energy efficiency of buildings , decarbonisation of heating and cooling of buildings , including the integration of energy from renewable sources , and granting improved access to zero- and low-emission mobility and transport to the benefit of vulnerable households , vulnerable micro-enterprises and vulnerable transport users. ### (13) a social climate (‘the fund’) should therefore be established to provide funds to the member states and local and regional governments to support their policies to address the social impacts of the emissions trading for buildings and road transport on vulnerable households , vulnerable micro-enterprises and vulnerable transport users. this should be achieved notably through temporary income support and measures and investments intended to reduce reliance on fossil fuels through increased energy efficiency of buildings , decarbonisation of heating and cooling of buildings , including the integration of energy from renewable sources , and granting improved access to zero- and low-emission mobility and transport to the benefit of vulnerable households , self employed , vulnerable micro-enterprises and vulnerable transport users.


### (13) a social climate (‘the fund’) should therefore be established to provide funds to the member states to support their policies to address the social impacts of the emissions trading for buildings and road transport on vulnerable households , vulnerable micro-enterprises and vulnerable transport users. this should be achieved notably through temporary income support and measures and investments intended to reduce reliance on fossil fuels through increased energy efficiency of buildings , decarbonisation of heating and cooling of buildings , including the integration of energy from renewable sources , and granting improved access to zero- and low-emission mobility and transport to the benefit of vulnerable households , vulnerable micro-enterprises and vulnerable transport users. ### (13) a social climate (‘the fund’) should therefore be established to provide funds to the member states to support their policies to address the social impacts of the emissions trading for buildings and road transport on vulnerable households , vulnerable micro-enterprises and smes and vulnerable transport users. this should be achieved notably through temporary income support and measures and investments intended to reduce reliance on fossil fuels through increased energy efficiency of buildings , decarbonisation of heating and cooling of buildings , including the integration of energy from renewable sources , and granting improved access to zero- and low-emission mobility and transport to the benefit of vulnerable households , vulnerable micro-enterprises and smes and vulnerable transport users.


### (13) a social climate (‘the fund’) should therefore be established to provide funds to the member states to support their policies to address the social impacts of the emissions trading for buildings and road transport on vulnerable households , vulnerable micro-enterprises and vulnerable transport users. this should be achieved notably through temporary income support and measures and investments intended to reduce reliance on fossil fuels through increased energy efficiency of buildings , decarbonisation of heating and cooling of buildings , including the integration of energy from renewable sources , and granting improved access to zero- and low-emission mobility and transport to the benefit of vulnerable households , vulnerable micro-enterprises and vulnerable transport users. ### (13) a social climate (‘the fund’) should therefore be established to provide funds to the member states to support their policies to address the social impacts of the emissions trading for buildings and road transport on vulnerable households , self employed vulnerable micro-enterprises and vulnerable transport users. this should be achieved notably through temporary income support and measures and investments intended to reduce reliance on fossil fuels through increased energy efficiency of buildings , decarbonisation of heating and cooling of buildings , including the integration of energy from renewable sources , and granting improved access to zero- and low-emission mobility and transport to the benefit of vulnerable households , vulnerable micro-enterprises and vulnerable transport users.


### (13) a social climate (‘the fund’) should therefore be established to provide funds to the member states to support their policies to address the social impacts of the emissions trading for buildings and road transport on vulnerable households , vulnerable micro-enterprises and vulnerable transport users. this should be achieved notably through temporary income support and measures and investments intended to reduce reliance on fossil fuels through increased energy efficiency of buildings , decarbonisation of heating and cooling of buildings , including the integration of energy from renewable sources , and granting improved access to zero- and low-emission mobility and transport to the benefit of vulnerable households , vulnerable micro-enterprises and vulnerable transport users. ### (13) a social climate fund (‘the fund’) should therefore be established to provide funds to the member states to support their policies to address the social impacts of the emissions trading for buildings and road transport on vulnerable households , vulnerable micro-enterprises , vulnerable smes and vulnerable transport users. this should be achieved notably through income support and measures and investments intended to reduce reliance on fossil fuels through increased energy efficiency of buildings , decarbonisation of heating and cooling of buildings , including the integration of energy from renewable sources , and granting improved access to zero- and low-emission mobility and transport to the benefit of vulnerable households , vulnerable micro-enterprises , vulnerable smes and vulnerable transport users.


### (14) for that purpose , each member state should submit to the commission a social climate plan (‘the plan’). those plans should pursue two objectives. firstly , they should provide vulnerable households , vulnerable micro-enterprises and vulnerable transport users the necessary resources to finance and carry out investments in energy efficiency , decarbonisation of heating and cooling , in zero- and low-emission vehicles and mobility. secondly , they should mitigate the impact of the increase in the cost of fossil fuels on the most vulnerable and thereby prevent energy and transport poverty during the transition period until such investments have been implemented. the plans should have an investment component promoting the long-term solution of reduce fossil fuels reliance and could envisage other measures , including temporary direct income support to mitigate adverse income effects in the shorter term. ### (14) for that purpose , each member state should submit to the commission a social climate plan (‘the plan’). those plans should pursue two objectives. firstly , they should provide vulnerable households , vulnerable micro-enterprises and vulnerable transport users the necessary resources to finance and carry out investments in energy efficiency , decarbonisation of heating and cooling , in zero- and low-emission vehicles and mobility. secondly , they should mitigate the impact of the increase in the cost of fossil fuels on the most vulnerable and thereby prevent energy and transport poverty during the transition period until such investments have been implemented. the plans should have an investment component promoting the long-term solution of reduce fossil fuels reliance and could envisage other measures , including temporary direct income support to mitigate adverse income effects in the shorter term. it will need to be kept in mind that especially in insular and peripheral regions , such investment is likely not to benefit from economies of scale and to require a financial envelope that at first sight will appear to be disproportionate to the results that it will seek to achieve.


### (14) for that purpose , each member state should submit to the commission a social climate plan (‘the plan’). those plans should pursue two objectives. firstly , they should provide vulnerable households , vulnerable micro-enterprises and vulnerable transport users the necessary resources to finance and carry out investments in energy efficiency , decarbonisation of heating and cooling , in zero- and low-emission vehicles and mobility. secondly , they should mitigate the impact of the increase in the cost of fossil fuels on the most vulnerable and thereby prevent energy and transport poverty during the transition period until such investments have been implemented. the plans should have an investment component promoting the long-term solution of reduce fossil fuels reliance and could envisage other measures , including temporary direct income support to mitigate adverse income effects in the shorter term. ### (14) for that purpose , each member state should submit to the commission a social climate plan (‘the plan’). those plans should pursue two objectives. firstly , they should provide vulnerable households , self employed , vulnerable micro-enterprises vulnerable transport users and local and regional governments the necessary resources to finance and carry out investments in energy efficiency , decarbonisation of heating and cooling , in zero- and low-emission vehicles public transport and mobility. secondly , they should mitigate the impact of the increase in the cost of fossil fuels on the most vulnerable and thereby prevent energy and transport poverty during the transition period until such investments have been implemented. the plans should have an investment component promoting the long-term solution of reduce fossil fuels reliance and could envisage other measures , including temporary direct income support to mitigate adverse income effects in the shorter term.


### (14) for that purpose , each member state should submit to the commission a social climate plan (‘the plan’). those plans should pursue two objectives. firstly , they should provide vulnerable households , vulnerable micro-enterprises and vulnerable transport users the necessary resources to finance and carry out investments in energy efficiency , decarbonisation of heating and cooling , in zero- and low-emission vehicles and mobility. secondly , they should mitigate the impact of the increase in the cost of fossil fuels on the most vulnerable and thereby prevent energy and transport poverty during the transition period until such investments have been implemented. the plans should have an investment component promoting the long-term solution of reduce fossil fuels reliance and could envisage other measures , including temporary direct income support to mitigate adverse income effects in the shorter term. ### (14) for that purpose , each member state should submit to the commission a social climate plan (‘the plan’). those plans should pursue two objectives. firstly , they should provide vulnerable households , vulnerable micro-enterprises and smes and vulnerable transport users the necessary resources to finance and carry out investments in energy efficiency , decarbonisation of heating and cooling , in zero- and low-emission vehicles and mobility. secondly , they should mitigate the impact of the increase in the cost of fossil fuels on the most vulnerable and thereby prevent energy and transport poverty during the transition period until such investments have been implemented. the plans should have an investment component promoting the long-term solution of reduce fossil fuels reliance and could envisage other measures , including temporary direct income support to mitigate adverse income effects in the shorter term.


### (14) for that purpose , each member state should submit to the commission a social climate plan (‘the plan’). those plans should pursue two objectives. firstly , they should provide vulnerable households , vulnerable micro-enterprises and vulnerable transport users the necessary resources to finance and carry out investments in energy efficiency , decarbonisation of heating and cooling , in zero- and low-emission vehicles and mobility. secondly , they should mitigate the impact of the increase in the cost of fossil fuels on the most vulnerable and thereby prevent energy and transport poverty during the transition period until such investments have been implemented. the plans should have an investment component promoting the long-term solution of reduce fossil fuels reliance and could envisage other measures , including temporary direct income support to mitigate adverse income effects in the shorter term. ### (14) for that purpose , each member state should submit to the commission a social climate plan (‘the plan’). those plans should pursue two objectives. firstly , they should provide vulnerable households , vulnerable micro-enterprises , vulnerable smes and vulnerable transport users the necessary resources to finance and carry out investments in energy efficiency , decarbonisation of heating and cooling , in zero- and low-emission vehicles and mobility. secondly , they should mitigate the impact of the increase in the cost of fossil fuels on the most vulnerable and thereby prevent energy and transport poverty during the transition period until such investments have been implemented. the plans should have an investment component promoting the long-term solution of reduce fossil fuels reliance and could envisage other measures , including direct income support to mitigate adverse income effects in the shorter term.


### (15) member states , in consultation with regional level authorities , are best placed to design and to implement plans that are adapted and targeted to their local , regional and national circumstances as their existing policies in the relevant areas and planned use of other relevant eu funds. in that manner , the broad diversity of situations , the specific knowledge of local and regional governments , research and innovation and industrial relations and social dialogue structures , as well as national traditions , can best be respected and contribute to the effectiveness and efficiency of the overall support to the vulnerable. ### (15) member states , in consultation with social partners and regional and local level authorities , social partners and civil society organisations working with vulnerable people are best placed to design and to implement plans that are adapted and targeted to their local , regional and national circumstances as their existing policies in the relevant areas and planned use of other relevant eu funds. in that manner , the broad diversity of situations , the specific knowledge of local and regional governments , research and innovation and industrial relations and social dialogue structures , as well as national traditions , can best be respected and contribute to the effectiveness and efficiency of the overall support to the vulnerable and to the scaling up of projects developed by local and regional authorities and social partners.


### (15) member states , in consultation with regional level authorities , are best placed to design and to implement plans that are adapted and targeted to their local , regional and national circumstances as their existing policies in the relevant areas and planned use of other relevant eu funds. in that manner , the broad diversity of situations , the specific knowledge of local and regional governments , research and innovation and industrial relations and social dialogue structures , as well as national traditions , can best be respected and contribute to the effectiveness and efficiency of the overall support to the vulnerable. ### (15) member states , in consultation with regional and local level authorities and civil society organisations , are best placed to design and to implement plans that are adapted and targeted to their local , regional and national circumstances as their existing policies in the relevant areas and planned use of other relevant eu funds. in that manner , the broad diversity of situations , the specific knowledge of local and regional governments , research and innovation and industrial relations and social dialogue structures , as well as national traditions , can best be respected and contribute to the effectiveness and efficiency of the overall support to the vulnerable.


### (15) member states , in consultation with regional level authorities , are best placed to design and to implement plans that are adapted and targeted to their local , regional and national circumstances as their existing policies in the relevant areas and planned use of other relevant eu funds. in that manner , the broad diversity of situations , the specific knowledge of local and regional governments , research and innovation and industrial relations and social dialogue structures , as well as national traditions , can best be respected and contribute to the effectiveness and efficiency of the overall support to the vulnerable. ### (15) member states , in consultation with regional , local level authorities and civil society organisations , are best placed to design and to implement plans that are adapted and targeted to their local , regional and national circumstances as their existing policies in the relevant areas and planned use of other relevant eu funds. in that manner , the broad diversity of situations , the specific knowledge of local and regional governments , research and innovation and industrial relations and social dialogue structures , as well as national traditions , can best be respected and contribute to the effectiveness and efficiency of the overall support to the vulnerable.


### (16) ensuring that the measures and investments are particularly targeted towards energy poor or vulnerable households , vulnerable micro-enterprises and vulnerable transport users is key for a just transition towards climate neutrality. support measures to promote reductions in greenhouse gas emissions should help member states to address the social impacts arising from the emissions trading for the sectors of buildings and road transport. ### (16) ensuring that the measures and investments are particularly targeted towards energy poor or vulnerable households , self employed , vulnerable micro-enterprises and vulnerable transport users is key for a just transition towards climate neutrality. support measures to promote reductions in greenhouse gas emissions should help member states to address the social impacts arising from the emissions trading for the sectors of buildings and road transport.


### (16) ensuring that the measures and investments are particularly targeted towards energy poor or vulnerable households , vulnerable micro-enterprises and vulnerable transport users is key for a just transition towards climate neutrality. support measures to promote reductions in greenhouse gas emissions should help member states to address the social impacts arising from the emissions trading for the sectors of buildings and road transport. ### (16) ensuring that the measures and investments are particularly targeted towards energy poor or vulnerable households , vulnerable micro-enterprises and smes and vulnerable transport users is key for a just transition towards climate neutrality. support measures to promote reductions in greenhouse gas emissions should help member states to address the social impacts arising from the emissions trading for the sectors of buildings and road transport.


### (16) ensuring that the measures and investments are particularly targeted towards energy poor or vulnerable households , vulnerable micro-enterprises and vulnerable transport users is key for a just transition towards climate neutrality. support measures to promote reductions in greenhouse gas emissions should help member states to address the social impacts arising from the emissions trading for the sectors of buildings and road transport. ### (16) ensuring that the measures and investments are particularly targeted towards energy poor or vulnerable households , vulnerable micro-enterprises , vulnerable smes and vulnerable transport users is key for a just transition towards climate neutrality. support measures to promote reductions in greenhouse gas emissions should help member states to address the social impacts arising from the emissions trading for the sectors of buildings and road transport.


### (18) taking into account the importance of tackling climate change in line with paris agreement commitments , and the commitment to the united nations sustainable development goals , the actions under this regulation should contribute to the achievement of the target that 30% of all expenditure under the 2021-2027 multiannual financial framework should be spent on mainstreaming climate objectives and should contribute to the ambition of providing 10% of annual spending to biodiversity objectives in 2026 and 2027 , while considering the existing overlaps between climate and biodiversity goals. for this purpose , the methodology set out in annex ii of regulation (eu) 2021/1060 of the european parliament and of the council33 should be used to tag the expenditures of the fund. the fund should support activities that fully respect the climate and environmental standards and priorities of the union and comply with the principle of ‘do no significant harm’ within the meaning of article 17 of regulation (eu) 2020/852 of the european parliament and of the council34 . only such measures and investments should be included in the plans. direct income support measures should as a rule be considered as having an insignificant foreseeable impact on environmental objectives , and as such be considered compliant with the principle of ‘do no significant harm’. the commission intends to issue technical guidance to the member states well ahead of the preparation of the plans. the guidance will explain how the measures and investments must comply with the principle of ‘do no significant harm’ within the meaning of article 17 of regulation (eu) 2020/852. the commission intends to present in 2021 a proposal for a council recommendation on how to address the social aspects of the green transition. ### (18) taking into account the importance of tackling climate change in line with paris agreement commitments , and the commitment to the united nations sustainable development goals , the actions under this regulation should contribute to the achievement of the target that 30% of all expenditure under the 2021-2027 multiannual financial framework should be spent on mainstreaming climate objectives and should contribute to the ambition of providing 10% of annual spending to biodiversity objectives in 2026 and 2027 , while considering the existing overlaps between climate and biodiversity goals. for this purpose , the methodology set out in annex ii of regulation (eu) 2021/1060 of the european parliament and of the council33 should be used to tag the expenditures of the fund. the fund should support activities that fully respect the climate and environmental standards and priorities of the union as well as all measures intended to safeguard the national heritage , and comply with the principle of ‘do no significant harm’ within the meaning of article 17 of regulation (eu) 2020/852 of the european parliament and of the council34 . only such measures and investments should be included in the plans. direct income support measures should as a rule be considered as having an insignificant foreseeable impact on environmental objectives , and as such be considered compliant with the principle of ‘do no significant harm’ not least with reference to the natural and historic heritage. the commission intends to issue technical guidance to the member states well ahead of the preparation of the plans. the guidance will explain how the measures and investments must comply with the principle of ‘do no significant harm’ within the meaning of article 17 of regulation (eu) 2020/852. the commission intends to present in 2021 a proposal for a council recommendation on how to address the social aspects of the green transition.


### (18) taking into account the importance of tackling climate change in line with paris agreement commitments , and the commitment to the united nations sustainable development goals , the actions under this regulation should contribute to the achievement of the target that 30% of all expenditure under the 2021-2027 multiannual financial framework should be spent on mainstreaming climate objectives and should contribute to the ambition of providing 10% of annual spending to biodiversity objectives in 2026 and 2027 , while considering the existing overlaps between climate and biodiversity goals. for this purpose , the methodology set out in annex ii of regulation (eu) 2021/1060 of the european parliament and of the council33 should be used to tag the expenditures of the fund. the fund should support activities that fully respect the climate and environmental standards and priorities of the union and comply with the principle of ‘do no significant harm’ within the meaning of article 17 of regulation (eu) 2020/852 of the european parliament and of the council34 . only such measures and investments should be included in the plans. direct income support measures should as a rule be considered as having an insignificant foreseeable impact on environmental objectives , and as such be considered compliant with the principle of ‘do no significant harm’. the commission intends to issue technical guidance to the member states well ahead of the preparation of the plans. the guidance will explain how the measures and investments must comply with the principle of ‘do no significant harm’ within the meaning of article 17 of regulation (eu) 2020/852. the commission intends to present in 2021 a proposal for a council recommendation on how to address the social aspects of the green transition. ### (18) taking into account the importance of tackling climate change in line with paris agreement commitments , and the commitment to the united nations sustainable development goals , the actions under this regulation should contribute to the achievement of the target that at least 30 % of the total amount of the union budget and the european union recovery instrument expenditure should be spent to supporting climate objectives and should contribute to the ambition of providing 7.5 % of annual spending under the multiannual financial framework to biodiversity objectives in 2024 and 10% of annual spending to biodiversity objectives in 2026 and 2027 , while considering the existing overlaps between climate and biodiversity goals. for this purpose , the methodology set out in annex ii of regulation (eu) 2021/1060 of the european parliament and of the council33 should be used to tag the expenditures of the fund. the fund should support activities that fully respect the climate and environmental standards and priorities of the union and comply with the principle of ‘do no significant harm’ within the meaning of article 17 of regulation (eu) 2020/852 of the european parliament and of the council34 . only such measures and investments should be included in the plans. direct income support measures should as a rule be considered as having an insignificant foreseeable impact on environmental objectives , and as such be considered compliant with the principle of ‘do no significant harm’. the commission intends to issue technical guidance to the member states well ahead of the preparation of the plans. the guidance will explain how the measures and investments must comply with the principle of ‘do no significant harm’ within the meaning of article 17 of regulation (eu) 2020/852. the commission intends to present in 2021 a proposal for a council recommendation on how to address the social aspects of the green transition.


### (19) women are particularly affected by carbon pricing as they represent 85% of single parent families. single parent families have a particularly high risk of child poverty. gender equality and equal opportunities for all , and the mainstreaming of those objectives , as well as questions of accessibility for persons with disabilities should be taken into account and promoted throughout the preparation and implementation of plans to ensure no one is left behind. ### (19) women are disproportionally affected by the consequences of climate change1 a , by energy poverty and are particularly affected by carbon pricing due to the employment , income , pay and pension gaps. moreover , they represent 85% of single parent families , which have a particularly high risk of child poverty and are under-represented as tenants. this limits women's participation in the energy transition , as they cannot afford energy-efficiency investments to reduce their energy consumption and have limited access to energy-efficiency retrofit programmes1 b. gender equality and equal opportunities for all , and the mainstreaming of those objectives , as well as questions of accessibility for persons with disabilities should be taken into account and promoted throughout the preparation and implementation of plans to ensure no one is left behind.