By Inti Landauro and Kate Abnett
BRUSSELS, Feb 5 (Reuters) – The European Investment Bank (EIB) will “front load” 3 billion euros ($3.5 billion) to governments to invest in shielding poorer citizens from an upcoming EU carbon price 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 it has met opposition from countries including Poland and the Czech Republic, who say it would raise fuel and heating bills. The EU 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 now, 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, a spokesperson for the bank said.
The scheme will invest in projects to help poorer citizens and small businesses switch to cleaner cars and heating systems, or insulating draughty homes to use less energy, so that they are less exposed to the CO2 emissions price when the carbon market launches.
The EU has introduced other measures to try to quell political pushback on the new carbon market, including stricter price controls, after 19 countries including the Czech Republic, France and Germany demanded this last year.
($1 = 0.8483 euros)
(Reporting by Kate Abnett;Editing by Inti Landauro and Louise Heavens)
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