A new ETS2 Frontloading Facility, developed in cooperation with the European Commission, was approved on February 4, 2026, by the European Investment Bank (EIB). Under the Emissions Trading System for buildings and road transport (ETS2), the EIB has approved a major facility providing €3 billion in funding for investment opportunities aimed at decarbonising buildings and road transport.
While ETS2 is still being prepared for launch, the facility initiative supports a more affordable energy transition in these sectors, particularly benefiting low- and middle-income households and small European businesses. Specifically, it will support investments in:
- Energy-efficient heating and cooling systems.
- Building renovation and insulation upgrades.
- Support for micro, small, and medium-sized enterprises (MSMEs).
- Sustainable transport options, such as electric bikes and improvements to public transport infrastructure.
Furthermore, the ETS2 Frontloading Facility anticipates future cost burdens arising from the transition. Fossil fuels used in homes are expected to face carbon pricing by 2027, marking a significant shift, as these fuels’ costs were previously unregulated despite their environmental impact. With the €3 billion made available through the EIB and the Commission, achieving the EU’s climate goals will be more equitable than ever. As Wopke Hoekstra, Commissioner for Climate, Net-Zero, and Clean Growth, explains: “This is part of a package of measures to ensure a smooth phase in of ETS2 and socially fair transition. And this will come on top of the Social Climate Fund.”
Sources:
European Commission, Devdiscourse, European Heat Pump Association
