# Chancellor Merz Defends EU Emissions Trading System Against Reform Germany rejects calls to weaken carbon pricing mechanisms despite industrial pressure. - **Source:** [Il Sole 24 Ore – Mondo](https://www.ilsole24ore.com/sez/mondo) - **Published:** 2026-11-12 - **Topic:** [politics](https://brifing.si/c/politics) - **Original article:** - **On Brifing:** https://brifing.si/s/0a3bb26d-4b44-4baa-add1-9722ca79b993 ## German Stance on ETS Chancellor Friedrich Merz has officially committed Germany to upholding the European Union's Emissions Trading System, known as ETS1. In a letter dated November 6 to Commission President Ursula von der Leyen, he explicitly rejected calls from Italy and the Czech Republic to weaken the carbon pricing mechanism currently governing industrial emissions. ## Opposition to ETS2 Changes Merz has firmly closed the door on any further modifications to ETS2, which extends carbon pricing to road transport and buildings. Despite industry concerns regarding costs, the Chancellor insists that discussions regarding ETS1 and ETS2 remain separate, maintaining the previously agreed-upon implementation timeline for the latter, which is scheduled for 2028. ## Investment Security Rationale The German government argues that the ETS is a market-based tool that functions effectively. Merz emphasized that European energy and industrial firms have built their business models on reliable carbon price signals. Altering these rules mid-stream would undermine the regulatory framework and jeopardize the long-term investment security required for green transitions. ## Internal Industrial Divide While energy-intensive sectors in Germany have expressed concerns over costs, they do not represent a unified front. Significant segments of the steel industry, which have already invested in green transitions, actively oppose changing the rules. These companies prefer a stable regulatory environment over short-term relief that could disrupt their strategic planning. ## Economic Decoupling Metrics Data from the European Commission highlights the system's impact, showing that net greenhouse gas emissions in the EU are 39% lower than in 1990, while GDP has grown by 74%. This data is used by Brussels to support the argument that decarbonization can be successfully decoupled from overall economic growth. ## Financial Impact of ETS The emissions trading system generated 43.2 billion euros in revenue during 2025, marking an 11% increase over 2024 figures. Of this total, 23.9 billion euros were allocated to member states specifically to fund green transition projects, demonstrating the mechanism's role in financing the broader European shift toward sustainable industrial practices. ## Future Reform Expectations The European Commission presented a reform proposal in July to make the ETS1 cap reduction more gradual. Merz has urged the Commission to conclude this process rapidly, aiming to make the system future-proof while enhancing industrial competitiveness. He seeks to resolve these issues before the upcoming extraordinary EU Council meetings in December. ## Strategic Policy Implications By taking this firm stance, Germany aims to stabilize the EU regulatory landscape following previous debates over internal combustion engines. Merz believes that maintaining the current course is essential for increasing the Union's resilience against future fossil fuel market crises, ensuring that both businesses and families can plan their futures with confidence. ## Sources covering this story - https://www.ilsole24ore.com/art/merz-schiera-germania-difesa-sistema-ets-AJgcJUEC — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._