What do I do if I cannot give a good reference to my PhD student? I've seen several questions from students about bad supervisor references but this is on the other side.
I have a PhD student whose priority during their PhD was family (had two children in 3 years) and social life. They are smart but simply did the minimum for the PhD. We had a talk some time ago and they were clear that their target was the minimum requirements set by the school and nothing more. Which is fine by me, since that what they want.
They've now asked me to write a reference letter for a very prestigious ECR fellowship. I personally know many members of the committee. The reference guidelines ask me to address the candidate's ability to work well under pressure, attract funding, take initiative, work independently, etc.
I am conflicted. My options as I see are:

I write a statement of facts. Worked in the group from X to Y, published N papers, etc. However, this will basically signal that I cannot support their candidacy since I don't address the specific guidelines.
I tell the student I cannot give a support letter. However, given they haven't worked with any other professor or group, it will leave them in bad place.

Any other options?
Update: Some more information based on questions/comments below.

The student was clear after the first year of their PhD (pre-COVID) that they want to do the minimum. For example, the requirement set by the university is to have &quot;publishable&quot; work and not to have published. So, the student did not want to go through the publication process except for &quot;easy&quot; conferences (2). All of my other PhDs until now have had 1 journal accepted and at least 1 submitted by the submission date.
The fact that they focus on family is the positive aspect for me. E.g., if they did the minimum because they were lazy, I wouldn't have problem to say I don't provide a reference letter. I don't know how many hours they actually put since I don't keep monitor (also, last 9 months have been remotely due to COVID).
I don't believe I can truthfully say that they comply with what I'm asked to comment on. E.g., good organizational skills: they have missed multiple deadlines, missed meetings, missed report submissions for their own funding which has a fixed yearly date (!). The excuse is always family or technical problems, but for the 3 years of joint work, I cannot truthfully say they have good organizational skills. I'll not extend to other aspects, but similar picture.
A student who did the minimum during their PhD has very little chance of getting a prestigious fellowship.  In the sciences, you must have publications to get prestigious fellowships; a student who did the minimum will not.  Your role as a mentor is to guide students to attempt things they might succeed in.  Tell the student they will not succeed in this application.  Tell them to compare their record to past successful applicants.
You should not write the letter.  It will not help the student and it can hurt your reputation.  But you should have told the student that they would not get a letter for prestigious fellowships when you discussed their goals for completing their PhD.