The European Union has taken an approach towards combating threat of climate change and environmental degradation by preparing vast and ambitious plan called the European Green Deal. The main goal is for the whole block of states to establish a sustainable economy. However, in order for the Green Deal to meet given goals, it requires a profound financial plan and many changes in running of the energy industry. Nevertheless, there is currently an expected gap in funding that must be complemented and concerns are raised whether the transition will truly be just for all. Consequently, a pressure is posed on households and ordinary citizens especially in particular regions and is likely to have negative social effects on them. This policy paper will focus on challenges posed to the social sector regarding the transition and funding of the Green Deal. Following, alternative solutions to cope with those challenges will be proposed together with their critical assessment.