Oct 10, 2025
The German environment minister calls on the EU to prolong the industry's emissions trading system beyond 2039.
Germany's Environment Minister Carsten Schneider has advocated for extending CO2 allowances in the EU emissions trading system (EU ETS) past 2039, stating that the planned end of certificate allocation by that year is too premature. He expressed the need to address job issues and post-2039 allowances, emphasizing that while Germany aims for climate neutrality by 2045 and the EU by 2050, they still require jobs in the chemical industries.
The EU ETS has been crucial in driving decarbonization across energy and industry, though initially criticized for low CO2 allowance prices. Recent reforms have increased these prices, encouraging companies to cut fossil fuel use. Currently, the emissions cap is set to be zero by around 2039.
Schneider noted that any ETS reforms must align with the proposed EU climate target for 2040, which aims for a 90% reduction in emissions compared to 1990 levels. He mentioned that until the EU's carbon border adjustment mechanism (CBAM) is fully operational, export-oriented industries should continue to receive free allowances, but he did not clarify his stance on deviating from existing rules.
The CBAM, designed to equalize competition for European industries and prevent "carbon leakage" by imposing a price on emissions in imported goods, is set to gradually replace free CO2 allowances. The EU plans to phase out these free allowances entirely by 2034.
Andreas Jung, the CDU/CSU parliamentary group's deputy chairman, also called for changes to the EU ETS, highlighting that many companies have already invested in climate protection technologies anticipating higher emissions costs. Alexandra Decker, CEO of Cemex Germany, warned that extending free allowances could hinder pioneering efforts. Meanwhile, German steelmaker Thyssenkrupp urged for "urgent adjustments" to the ETS to prevent the industry from falling behind global competitors, advocating for a slower, non-linear reduction of allowances until 2050.
The EU ETS has been crucial in driving decarbonization across energy and industry, though initially criticized for low CO2 allowance prices. Recent reforms have increased these prices, encouraging companies to cut fossil fuel use. Currently, the emissions cap is set to be zero by around 2039.
Schneider noted that any ETS reforms must align with the proposed EU climate target for 2040, which aims for a 90% reduction in emissions compared to 1990 levels. He mentioned that until the EU's carbon border adjustment mechanism (CBAM) is fully operational, export-oriented industries should continue to receive free allowances, but he did not clarify his stance on deviating from existing rules.
The CBAM, designed to equalize competition for European industries and prevent "carbon leakage" by imposing a price on emissions in imported goods, is set to gradually replace free CO2 allowances. The EU plans to phase out these free allowances entirely by 2034.
Andreas Jung, the CDU/CSU parliamentary group's deputy chairman, also called for changes to the EU ETS, highlighting that many companies have already invested in climate protection technologies anticipating higher emissions costs. Alexandra Decker, CEO of Cemex Germany, warned that extending free allowances could hinder pioneering efforts. Meanwhile, German steelmaker Thyssenkrupp urged for "urgent adjustments" to the ETS to prevent the industry from falling behind global competitors, advocating for a slower, non-linear reduction of allowances until 2050.