A coalition of 10 European countries, including Austria and Italy, urged the European Commission to reassess the Emissions Trading System (ETS), labeling the current legal framework as an “existential risk” for key industrial sectors. They requested an extension of free carbon allowances beyond 2034, arguing that rising energy prices and the planned phase-out of ETS free quotas threaten their industries’ viability.
The appeal comes as discussions intensify around the EU’s carbon market ahead of an EU summit addressing the energy crisis exacerbated by the Iran conflict. Some member states are pushing to abolish or modify the ETS, while others support its continuation.
The countries highlighted that the rapid pace of the carbon market’s evolution, coupled with inflation and energy costs, jeopardizes Europe’s industrial strength. They called for measures to stabilize carbon prices and urged a delay in the phase-out of free allowances until 2028 to provide businesses time to adapt.
Concerns over high electricity prices threaten the bloc’s competitiveness, pushing the countries to seek urgent action before the scheduled ETS review in summer. They aim for solutions to be proposed in weeks, emphasizing the pressing need for legislative change. Contrarily, other EU nations, like Denmark and Sweden, advocate for maintaining the ETS, arguing it benefits cross-border electricity trading and significantly reduces costs.
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