EU ministers are pressing Brussels to slow cuts to free carbon allowances, warning that rising costs could push heavy industry outside the bloc.
Several European Union countries are pressing Brussels to soften planned changes to the bloc’s carbon market, warning that sharper cuts to free emissions allowances could raise production costs and push heavy industry outside Europe.
The concerns were raised Thursday at a meeting of industry ministers in Brussels, where Bulgaria, the Czech Republic, Greece, Poland, Romania and Slovakia argued that steel, cement, aluminium and chemicals producers are being hit by high energy prices, geopolitical instability and tighter rules under the EU Emissions Trading System.
The dispute centers on how many free carbon allowances energy-intensive industries will receive from 2026 to 2030. The European Commission announced on May 11 that it intends to tighten those allocations, with reductions in some cases of up to 50% compared with the previous decade.
Ministers described the plan as a disappointment, according to Euronews, and a document circulated by the six countries argued that Brussels is asking some factories to decarbonise faster than current technology and commercial conditions allow. The governments said many heavy industrial processes still depend on fossil-fuel heat because lower-carbon alternatives are not yet available at scale or remain too expensive.
Italy and Austria also backed the call for relief. Italian Industry Minister Adolfo Urso said the pressure on industry was already severe before the latest Middle East conflict added to Europe’s energy concerns. “It was necessary then, it’s even more necessary now to deal with the situation,” Urso told counterparts.
Austrian Federal Economy and Energy Minister Wolfgang Hattmannsdorfer said steel producers face major decarbonisation costs over the next five years, estimated at between €1 billion and €2 billion. “The free (ETS) certificates need to be extended because the system is increasingly becoming a competitive disadvantage for our European industry,” he said.
The ministers are not calling for climate rules to be scrapped. Instead, they are seeking a slower transition, including a temporary freeze of benchmark values at current levels and a revised methodology that reflects actual production capacity and more realistic energy mixes.
Industry Commissioner Stéphane Séjourné signaled that the Commission may consider a more tailored approach as part of the ETS revision. He said Brussels would examine “an adapted methodology” that is more flexible for different sectors, while pointing to €30 billion in funds financed by 400 million ETS quotas to support industrial decarbonisation investment.
The next test is whether the Commission’s revision offers enough flexibility to satisfy governments worried about competitiveness without weakening the EU’s broader climate policy framework.
Comments (0)