German Chemical Industry Criticizes EU Carbon Pricing Plan
Chancellor Merz's support for ETS2 sparks industry backlash
1Industry Backlash
Germany’s chemical industry has strongly criticized Chancellor Friedrich Merz for supporting the EU’s expanded carbon-pricing scheme, ETS2. The industry fears the plan will harm European competitiveness, labeling it the 'gravedigger' of industry. The scheme, initially set for 2027, has been postponed to 2028.
2Merz's Stance
In a letter to European Commission President Ursula von der Leyen, Merz urged the EU to proceed with ETS2 without further delays. He emphasized the need for planning certainty for companies and households, framing the issue as critical for the future of European industry.
3Cost Concerns
German chemical firms already face a national carbon levy on transport and heating fuels, introduced in 2021. The EU-wide carbon price under ETS2 could exacerbate costs, putting German companies at a competitive disadvantage compared to other EU member states without similar levies.
4Global Competition
Major chemical producers like BASF argue that stringent EU climate rules disadvantage them against competitors in China and the U.S. The industry fears additional carbon costs could lead to plant closures, investment cuts, and relocations outside Europe.
5ETS1 Reforms
The European Commission has proposed reforms to the existing ETS1, slowing the reduction of emissions caps post-2030 and extending free allowances for decarbonization investments. While industry supports these measures, climate groups argue they weaken emission reduction incentives.
6Merz's Defense
Merz defended ETS1, calling it a well-functioning, market-based system. He stressed that energy and industrial companies rely on stable carbon-price signals for investment planning, urging the EU not to undermine the system.
7Political Pressure
Several EU governments, concerned about rising fuel and heating costs, are pushing for further delays to ETS2. Merz’s intervention highlights the tension between climate goals and economic competitiveness in Europe.
8Broader Implications
The debate over ETS2 reflects broader challenges in balancing climate action with industrial competitiveness. The outcome will shape Europe’s ability to meet emission targets while maintaining its industrial base in a globalized economy.
Original article: RFI English — German Chemical Industry Criticizes EU Carbon Pricing Plan