Today, a coalition of civil society and energy justice organizations issued a joint letter to the European Investment Bank (EIB) Board of Directors. The letter strongly advocates for the proposed ETS2 Frontloading Facility to be firmly aligned with the social equity goals of the Social Climate Fund (SCF), ensuring it provides significant assistance to vulnerable households throughout the EU.
Given the impending implementation of the Emissions Trading System for road transport and buildings (ETS2) and the growing political opposition in various Member States, the undersigned stress that the success of the Frontloading Facility’s design and rollout will be crucial for the social credibility and public acceptance of the EU’s climate policy.
What the letter calls for
In the letter addressed to the EIB Board, the coalition, including members of the Social Climate Fund Tracker Group and the Social and Green EIB Coalition, outlines a set of concrete recommendations to guide the Facility’s implementation:
- Fast-track alignment with national social climate plans: prioritising investments that are already included in adopted or draft NSCPs to ensure rapid deployment of funds.
- Solidarity across Member States: applying the SCF redistribution key to ensure that funds reach countries with high energy poverty and lower GDP from the outset.
- Robust social and environmental due diligence: ensuring that financed projects deliver clear social benefits and comply with the EIB’s Environmental and Social Sustainability Framework.
- Improved reporting and transparency: advocating for narrative reporting on how ETS2 revenues are spent and how social objectives are prioritised.
- Targeted support instruments: such as affordable renovation loans and genuinely inclusive social leasing schemes for zero-emission vehicles tailored to low-income households.
Accelerating a Just Transition: The Role of the Frontloading Facility
The introduction of ETS2, which will price carbon in the buildings and road transport sectors, directly impacts household energy and mobility costs. The Frontloading Facility is crucial because it offers an immediate chance to fund clean, affordable heat and transport solutions before the carbon revenues begin to flow in 2027.
By providing early funding, the Facility can proactively address energy and transport poverty, enhance the political durability of ETS2, and secure a foundation for a socially just transition.
Crucially, the Facility is not just a financing mechanism. As the letter emphasizes, it must also establish a standard for how EU climate finance effectively delivers social justice, solidarity, and transparency on a large scale.