This commentary is addressing the Industrial Decarbonisation Bank’s highly consequential role in how industrial transition unfolds across Member States, as well as its implications for Central and Eastern Europe (CEE).
The Industrial Decarbonisation Bank (IDB) aims to support Europe’s most energy-intensive industries in decarbonising, but its impact is already threatened by ongoing dynamics of the ETS review and the broader negotiations of the EU’s Multiannual Financial Framework and industrial policy.
Author’s Insights:
“To ensure equitable access to the IDB, solidarity provisions will be required, building on the success of the Modernisation Fund, which has ringfenced a dedicated stream of support for the countries where the transition challenge is greatest. The fund should be extended post-2030 and its scope expanded to more clearly support industrial transformation, including for direct electrification and CCS. Both the IDB and the ETS Investment Booster also need a dedicated lower-income Member State provision, with allocation criteria calibrated to GDP per capita and industrial carbon intensity, not just project cost-competitiveness and first-come-first-served auctioning.
The coming months represent a narrow, decisive window for the IDB. For it to deliver, its two central tensions — speed and equity — must be resolved simultaneously rather than traded off. The ETS Investment Booster should launch early to build momentum while the more complex CCfD framework is developed. But speed pursued through a single EU-wide cost curve will entrench geographic imbalance, channelling scarce funds towards the regions already best placed to absorb them. Equity must be engineered into the instrument from the outset, through shared access to common auction infrastructure and, potentially, regional auction clustering.”
– Luminița Gabriela Horga
For or further details and media inquiries, please contact Luminița Gabriela Horga: luminita.horga@epg-thinktank.org