Ten countries are calling for a swift review of the European Union’s emissions trading system (ETS), citing concerns about its impact on European industry and economic competitiveness. The call for action comes ahead of a key EU summit scheduled to begin Thursday in Brussels.
A letter addressed to European Commission President Ursula von der Leyen and European Council President António Costa, signed by the leaders of the Czech Republic, Italy, Austria, Poland, Bulgaria, Croatia, Greece, Hungary, Slovakia, and Romania, requests that the Commission submit its review of the ETS by the conclude of May, rather than later in the summer.
The move highlights growing divisions within the EU over the pace and scope of its green transition, as some member states worry about the economic consequences of ambitious climate policies. The debate underscores the delicate balance between environmental goals and maintaining a strong industrial base in Europe.
“Europe stands at a critical crossroads. The decisions taken today in the area of competitiveness will determine our prosperity, technological leadership and strategic autonomy for decades to come,” the letter states. The leaders argue that a successful green transformation depends on a robust European industrial base.
The countries contend that the current trajectory of the ETS, as it stands through 2034, is “too steep and overly ambitious.” They express concern that, combined with high energy prices and the phasing out of free allowances, the system poses an “existential risk” to key European industries.
“Today the trajectory, as foreseen by the EU Emissions Trading System (ETS) until 2034, is too steep and overly ambitious,” the letter reads.
The Czech Republic is also proposing specific changes to the system, including a price cap for allowances and exemptions for energy-intensive industries. Prague also wants to strengthen the Market Stability Reserve, a mechanism designed to address price volatility.
Czech Prime Minister Andrej Babiš has previously described the current system as an “absolute disaster,” claiming the country has lost nearly 160 billion crowns as a result.
Von der Leyen acknowledged the need to adapt the ETS to new conditions in a letter to EU leaders this week. “It is necessary to ensure that the ETS system is adapted to the new conditions,” she wrote.
The ten countries are calling for a “thorough review” of the ETS focused on mitigating its impact on electricity prices and reducing price volatility, including extending free allowances under ETS 1 beyond 2034.
“Time is of the essence, and the corresponding legislative proposal should therefore not wait until the summer. The review of ETS 1 should be submitted by the end of May at the latest,” the letter concludes.
Meanwhile, eight other countries – the Netherlands, Denmark, Finland, Portugal, Spain, Sweden, Luxembourg, and Slovenia – have voiced support for the ETS and urged Brussels not to weaken it, viewing it as a cornerstone of European climate policy.
The European Commission President defended the system last week in Strasbourg, stating, “Without this system, the EU would be even more vulnerable and dependent. The Union needs the emissions trading system, but it needs to be modernized.”
ETS 1 is the EU’s primary carbon market, covering energy, large industry, and aviation. ETS 2, originally slated to launch in 2026 but delayed until 2028, would extend the system to road transport and heating.
