EU states seek deal on emissions trading reform

European Union member states are aiming to agree on reforming the bloc’s emissions trading system by December, with a proposed requirement for industries to invest in Europe to qualify for free emissions allowances emerging as a point of disagreement, ERR reported.

EU energy ministers held their first discussion of the European Commission’s summer proposal. Estonia’s energy and environment minister, Erkki Keldo, said it was important that the reform did not impose new unreasonable obligations on industry.

Keldo pointed to Estonia’s oil shale sector, saying there was no economic case at present for investments such as carbon capture because economically viable new technologies were not available. Under the Commission’s proposal, industry would have to make investments of this kind to receive free allowances.

The Commission says the requirement is intended to address a situation in which Europe imports polluting products instead of developing cleaner production at home. Several member states, however, argue that the condition could worsen the problem and weaken European industry’s competitiveness. France’s minister for ecological transition, Monique Barbut, said it would increase administrative costs and create unfair competition between European companies subject to the rules and companies outside the EU.

European Commission climate commissioner Wopke Hoekstra defended the proposal, saying almost all member states had called for more investment in Europe and that conditions could help bring it about.

Estonia also wants the planned extension of the system to road fuels, known as ETS2, to be cancelled. Keldo said measures must be realistic and acceptable to the public, warning that sharply higher household costs could undermine support. Italy, Czechia, Poland and Slovakia share those concerns, while some member states want a more ambitious emissions trading system. Denmark’s climate and energy minister, Samira Nawa, said failure to act would leave Europe dependent on expensive energy and vulnerable to energy blackmail.