[Asia Economy Reporter Park Byung-hee] Major foreign media reported on the 12th that the European Union (EU) Commission's carbon tax reform plan, to be unveiled on the 14th (local time), also includes a proposal to establish a social fund to support vulnerable groups. This is a countermeasure in response to concerns that the increase in carbon tax could lead to higher heating and automobile fuel costs, thereby increasing the financial burden on low-income households.
According to the draft of the EU Commission's carbon tax reform plan, the establishment of a social fund is included as one of the 12 policies to be announced by the EU Commission on the 14th.
The EU Commission plans to create a fund to assist low-income vulnerable groups by using 20% of the revenue generated from the new carbon market.
The draft specifies that member state governments must prepare plans to provide funding for building renovations or the installation of carbon-free heating systems. It also states that member state governments should support at least half of the necessary funding for these plans and utilize the revenue obtained from the new carbon market.
A 2019 survey found that 7% of EU citizens do not earn enough income to cover heating costs.
The fund, named the "Climate Action Social Facility (CASF)," is scheduled to be operational from 2025. Meanwhile, the carbon markets related to buildings and transportation are planned to be established one year later, in 2026. Accordingly, the initial CASF funds will be supported by the EU budget.
Foreign media reported that the content may change before the official announcement on the 14th, and EU Commission officials have declined to provide official responses.
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