By Inti Landauro and Kate Abnett
BRUSSELS, Feb 5 (Reuters) – The European Investment Bank will fast-track 3 billion euros ($3.5 billion) of funding to governments to invest in shielding poorer citizens from the upcoming EU carbon market for heating and transport fuels, the European Commission said on Thursday.
The European Union’s new carbon market will impose a price from 2028 on CO2 emissions produced by heating and transport fuels, to encourage the shift to less polluting vehicles and home heating systems.
The policy is designed to curb climate change and reduce pollution, but has met opposition from countries including Poland and the Czech Republic, which say it will raise fuel and heating bills. The EU has already delayed the policy’s launch by one year, until 2028, to attempt to quell the pushback.
The EIB will provide 3 billion euros to EU governments to kick-start investments to help people shift to cleaner technologies before the CO2 price launches, in a move designed to help ease those concerns.
The EIB funding will eventually be repaid by revenues generated by the new carbon market after it launches in 2028.
The European Consumer Organisation (BEUC), a non-profit organisation, welcomed the move to help consumers and small businesses invest in electric cars, heat pumps, and insulating draughty homes.
“Hitting consumers with higher fuel prices without alternatives would be a recipe for failure. However, [EU] member states need to step their efforts in shaping the policies that will help consumers,” said Robin Loos, BEUC’s head of sustainability.
The EU has introduced other measures to try to address concerns about the new carbon market, including stricter price controls, after 19 countries demanded this last year.
($1 = 0.8483 euros)
(Reporting by Kate Abnett. Editing by Louise Heavens and Mark Potter)
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