Joint Civil Society Letter: Social and Green EIB Coalition Recommendations for the EIB’s ETS2
Overview:
This week Wednesday the Board of Directors of the European Investment Bank will decide on the Frontloading Facility that provides Member States with early access to a total of EUR 6 billion in early auctioning revenues from the upcoming extension of the EU emission trading system to the buildings and road transport sector (ETS2). The facility was proposed by Commissioner Hoekstra in October last year in response to concern with high price levels of the ETS2 expressed by Member States.
In a coalition with the SCF Tracker Group and the Social and Green EIB Coalition, FEANTSA welcomes the proposed ETS2 Frontloading Facility as a potentially decisive intervention at a critical moment for the social credibility of EU climate policy. As carbon pricing in buildings and transport approaches implementation amid growing political resistance, the design and deployment of this facility will directly shape whether ETS2 is perceived as a tool for a just transition or as contributing to social hardship. We therefore urge the EIB to ensure that the Frontloading Facility is firmly anchored in the objectives, safeguards, and targeting requirements of the Social Climate Fund (SCF) Regulation, and used to strengthen structural support for vulnerable households.
Key proposals:
Preference for “Fast-track” option: Support a preference for funding measures and investments already identified in adopted or draft NSCPs. Encourage as many Member States as possible to opt for this route, as it enables rapid deployment while maintaining alignment with the SCF framework.
Member States without NSCPs: For Member States that do not yet have an NSCP in place, prioritise funding for measures and investments that are demonstrably compliant with the SCF.
Member States opting for “broader ETS2 measures”: Where Member States choose to use the facility for broader ETS2-related measures, guidance should clearly anchor implementation in the requirements of the ETS Directive and position the facility as a benchmark for good practice
Solidarity Mechanism between Member States: The SCF redistributes ETS2 revenues among Member States to support those with higher rates of energy poverty and lower GDP. To ensure solidarity between Member States at the very beginning of the ETS and counterbalance resistance, applying the SCF redistributional key to the facility would set a strong signal. We recommend the net beneficiary countries of the SCF when deciding on the size of the loan.