Joint letter to establish an EU lending facility for ETS2 revenue for member states

A joint letter calling for an EU lending facility to frontload future ETS2 revenues, allowing Member States to invest in zero-emission alternatives for vulnerable households before the 2027 implementation of carbon pricing for buildings and road transport.

• The ETS2, extending carbon pricing to buildings and road transport, is scheduled to begin in 2027 to address insufficient decarbonisation in these sectors, where transport emissions have increased since 1990.
• The Social Climate Fund (SCF) is expected to have a budget of approximately €4 billion in 2026, based on the auctioning of 50 million ETS1 allowances at current price levels, but the authors argue this is insufficient to deliver enough zero-emission alternatives before ETS2 starts.
• The signatories propose a lending facility that provides loans to Member States for investment-related spending starting before 2026, using Social Climate Plans (SCPs) due by June 2025 for investment approval.
• Proposed mechanisms for the lending facility include using the undersubscribed loan compartment of the Recovery and Resilience Facility (RRF), Cohesion funds, or an intermediary such as the European Investment Bank (EIB) to provide low-interest loans.

APA

Carbon Market Watch (2025). Joint letter to establish an EU lending facility for ETS2 revenue for member states. https://carbonmarketwatch.org/wp-content/uploads/2025/03/Final-Draft_-Joint-letter-on-EU-lending-facility-for-ETS2-revenues-for-MS-1.pdf

Chicago

Carbon Market Watch. Joint letter to establish an EU lending facility for ETS2 revenue for member states. 2025. https://carbonmarketwatch.org/wp-content/uploads/2025/03/Final-Draft_-Joint-letter-on-EU-lending-facility-for-ETS2-revenues-for-MS-1.pdf.

Wikipedia

{{cite press release |author=Carbon Market Watch |title=Joint letter to establish an EU lending facility for ETS2 revenue for member states |date=March 2025 |url=https://carbonmarketwatch.org/wp-content/uploads/2025/03/Final-Draft_-Joint-letter-on-EU-lending-facility-for-ETS2-revenues-for-MS-1.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{carbonmarketwatch2025joint, author = {{Carbon Market Watch}}, title = {{Joint letter to establish an EU lending facility for ETS2 revenue for member states}}, publisher = {Carbon Market Watch}, year = {2025}, month = mar, url = {https://carbonmarketwatch.org/wp-content/uploads/2025/03/Final-Draft_-Joint-letter-on-EU-lending-facility-for-ETS2-revenues-for-MS-1.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }