Published by Global Banking & Finance Review®
Posted on February 5, 2026
2 min readLast updated: February 5, 2026
Add as preferred source on GoogleThe EIB will allocate €3 billion to help EU governments transition to a new carbon market, addressing concerns over CO2 pricing for heating and transport.
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)
The European Investment Bank (EIB) is the lending arm of the European Union, providing financing for projects that contribute to EU policy objectives, including climate change and sustainable development.
Carbon pricing is a method for reducing global warming emissions by assigning a cost to emitting carbon dioxide. It encourages businesses to reduce their carbon footprint.
CO2 emissions refer to the release of carbon dioxide into the atmosphere, primarily from burning fossil fuels, which contributes to climate change.
The European Commission is the executive branch of the European Union responsible for proposing legislation, implementing decisions, and managing the day-to-day operations of the EU.
The year 2028 is significant as it marks the implementation of the EU's new carbon market, which will impose a price on CO2 emissions from heating and transport fuels.
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