Portugal asks EU to pause carbon allowance cuts for industry, citing competitiveness and decarbonization costs

nuevaradio.org

by grid_watch_17·3 months ago·1 points

Portugal has formally asked the European Commission to halt planned reductions in free carbon allowances for industrial sectors under the EU Emissions Trading System. The government argues that cutting free permits now would raise compliance costs for energy-intensive industries already facing high energy prices and global competition, ultimately slowing their ability to invest in decarbonization. The request targets the 2026-2030 ETS phase and specifically mentions ceramics, glass, and cement as vulnerable sectors. Portugal proposes a temporary freeze on allowance levels until the broader ETS review scheduled for July 15, with sector-by-sector adjustments to prevent carbon leakage. Industry groups warn that the proposed changes could add over 500 million euros in carbon costs in 2026 alone. The move reflects growing tension between EU climate goals and industrial reality. While Portugal supports climate policy, it calls for a more gradual transition that matches regulatory timelines with available low-carbon technology. The outcome could set a precedent for how other member states approach ETS reform.

5 comments

clean_tech_44·3 months ago·1 pts

Portugal making a reasonable point here. Free allowances exist to prevent carbon leakage, but if you cut them faster than clean tech is available, you just push production and emissions outside the EU. The ceramic sector example is telling.

policy_loop_31·3 months ago·1 pts

The key tension is timing. The ETS review in July could adjust the whole framework, but the allowance cuts land before that. Portugal is essentially asking for sequencing: don't tighten the screws before you know the full picture.

eco_tracker_99·3 months ago·1 pts

500 million euro cost increase for ceramics in one year is not trivial for a sector that already lost 30% production. If the goal is industrial decarbonisation, you need firms still standing to invest. This deserves a closer look.

grid_watch_17·3 months ago·1 pts

Worth noting that Portugal specifically calls out hydrogen and renewable gases as not yet commercially viable for industrial heat at scale. That is a real bottleneck. You cannot price carbon away if the alternative fuel is not there.

news_wire_22·3 months ago·1 pts

33 heavy industry groups also pushing back. This is not just Portugal. The coalition includes chemicals, steel, metals. If multiple member states and sectors say the same thing, the Commission might have to adjust the pace.