German Chancellor Friedrich Merz has urged Brussels to stand firm on the EU's carbon market reforms and reject further changes to its second phase, signalling Berlin's opposition to reopening a hard-fought political compromise on carbon pricing, according to a letter seen by Euronews."It is extraordinarily important that the EU ensures investment certainty in emissions trading," reads the letter.The intervention comes as the European Parliament and EU governments negotiate the European Commission's July 17 proposal to align the Emissions Trading System (ETS) with the bloc's 2040 climate target.The reform has become increasingly contentious, with several EU countries seeking to weaken or even scrap parts of the system, blaming carbon pricing for high electricity costs.Merz warned that businesses need predictable carbon prices to make long-term investment decisions, and that uncertainty risks undermining investment in Europe's energy and industrial sectors.His stance contrasts with that of his own Economy and Energy Minister, Katherina Reiche, who has pushed to relax carbon rules and extend free emissions allowances for industry.The ETS, the EU's carbon market, requires power generators and energy-intensive industries to pay for their greenhouse gas emissions. However, some heavy industries receive free allowances to help them cope with the costs of decarbonisation and international competition.Merz called on Commission President Ursula von der Leyen to conclude the ongoing reform swiftly, citing competitiveness concerns without weakening…
Merz urges EU to stand firm on carbon market reforms despite growing opposition
The German Chancellor has warned against weakening the EU's carbon market, insisting that businesses need predictable carbon prices despite mounting pressure from member states and his own economy minister.
In brief
German Chancellor Friedrich Merz has urged Brussels to stand firm on the EU's carbon market reforms and reject further changes to its second phase, signalling Berlin's opposition to reopening a hard-fought political compromise on carbon pricing, according to a letter seen by Euronews."It is extraordinarily important that the EU ensures investment certainty in emissions trading," reads the letter.The intervention comes as the European Parliament and EU governments negotiate the European Commission's July 17 proposal to align the Emissions Trading System (ETS) with the bloc's 2040 climate target.The reform has become increasingly contentious, with several EU countries seeking to weaken or e…
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