Germany's chemical industry is pushing back after Chancellor Friedrich Merz told the European Commission to keep the EU's expanded carbon pricing scheme on track. The sector argues that ETS2, which would price emissions from heating and transport fuels from 2028, will put European producers at a lasting cost disadvantage. German firms already pay a national carbon levy of 55 to 65 euros per tonne on transport and heating fuels. The VCI chemical industry association says an EU-wide price on top would accelerate plant closures and investment cuts. Merz says delaying the scheme would hurt planning certainty for companies and households. The dispute sits alongside separate EU proposals to slow ETS1 cap reductions after 2030 and extend free allowances tied to decarbonisation investment. Climate groups say those changes weaken incentives to cut emissions, while industry says they are needed to keep production competitive. The outcome will shape European carbon prices for years.
