Efforts to weaken the new Emissions Trading System for buildings and road transport (ETS2)—culminating in a one-year delay to its start—make parallel measures essential to ensure its fair and socially sustainable implementation.
In this context, the European Commission—following interventions by civil society—has promoted the creation of an ETS2 Frontloading Facility through the European Investment Bank (EIB). This frontloading mechanism will allow Member States to gain early access to future revenues from the auctioning of emission allowances under ETS2 for buildings and road transport.
These resources can be mobilised immediately, before auction revenues become available, to finance investments such as residential energy renovations, the deployment of heat pumps, and sustainable mobility projects.
Recognising the importance of this mechanism for the timely and effective protection of vulnerable groups, The Green Tank co-signed a joint letter together with 16 environmental organisations and think tanks addressed to the EIB Board of Directors, with the aim of ensuring that the Facility meaningfully strengthens the social dimension of ETS2.
In the letter, we:
- Stress that this financing mechanism can play a decisive role in enabling a timely transition to clean solutions for heating and road transport, without placing a disproportionate burden on citizens—particularly vulnerable households.
- Call for safeguards to ensure that resources are used for measures aligned with the objectives of the Social Climate Fund (SCF), giving priority to investments already included in Social Climate Plans.
- Highlight that measures such as building renovations and leasing schemes for electric vehicles must be designed with strong social safeguards, including upfront grants, tenant protection, and collective schemes such as energy communities.
- Emphasise the need for transparency, monitoring and reporting on how funds are used, in order to ensure social accountability and meaningful assessment of impacts.
- Propose that access to early financing should take into account the provisions of the Social Climate Fund Regulation, so as to primarily support Member States facing high levels of energy poverty.
The establishment of the ETS2 Frontloading Facility and timely access to financing send a clear signal to Member States to accelerate the development of Social Climate Plans that focus on effective measures to address energy and transport vulnerability.
📄 Read the full letter we co-signed here.
