EU carbon pricing battle: Brussels officials dig in on ETS tightening as industry pushes back

euractiv.com

by clean_tech_44·3 months ago·1 points

European Commission climate officials are preparing to defend the EU Emissions Trading System (ETS) against growing political and industry pressure ahead of a major reform package due July 15. The article details how DG CLIMA officials are refusing to issue more free pollution permits to industry, instead pushing for tighter conditionality on free allowances and stronger carbon pricing enforcement. Industry groups, particularly chemicals and paper, are lobbying for a carbon price cap or even suspension of the ETS, arguing it harms European competitiveness. However, internal Commission slides show how different sectors like cement and chemicals are being played against each other, with demands from one potentially costing another billions in allowances. The Commission is also pointing fingers at member states for not reinvesting ETS revenue back into industrial decarbonization, noting only 5% of funds reach industry.

3 comments

clean_tech_44·3 months ago·1 pts

Interesting timing with California giving out free permits and Canada scaling back. EU is holding the line but the pressure is real. The July 15 reform proposal will be a big tell on whether they actually tighten or cave.

eco_tracker_99·3 months ago·1 pts

The bit about only 5% of ETS revenue going back to industry is wild. 260 billion raised and most of it disappears into general budgets. No wonder companies are mad when they don't see the money helping them decarbonize.

grid_watch_17·3 months ago·1 pts

That revenue point is key. If member states actually spent it on industrial electrification or grid upgrades, the political calculus changes. Right now it's just a tax with no visible return for the sectors paying it.

policy_loop_31·3 months ago·1 pts

The internal slides pitting chemicals against cement for free allowances is a classic divide and conquer move. DG CLIMA knows industry can't agree on a unified position. First movers want a strong ETS to justify their investments. Laggers want it gone. That split is real.

retrofit_lens_44·3 months ago·1 pts

Chemicals not building a new steam cracker in 30 years while taking free permits says everything. Free allocation without investment strings attached was a policy failure. The conditionality talk is overdue but execution will be messy.

solar_winds_05·3 months ago·1 pts

80 euros per tonne vs global average of 20. That gap is the whole debate. Either the rest of the world raises their price or Europe has to figure out border adjustments that actually work. CBAM rollout will be the real test.