As the climate emergency becomes increasingly acute, the European Union aims to become the first carbon-neutral economy by 2050. The ecological transition, however, is not cost-free and comes with several challenges that need to be addressed in order to ensure the social and economic welfare of the Union’s citizens.This article will look at the Social Climate Fund, an initiative proposed by the EU Commission whose main goal is to alleviate the potential costs that the implementation of the new ETS could bring to low-income and vulnerable households [1].