Oct 16, 2025
German industry calls for a discussion on the proposed stricter regulations for EU emissions allowance distributions.
Industry representatives in Germany have called for a discussion on the proposed stricter EU emissions trading rules, suggesting that these changes might harm the bloc's competitiveness, as reported by Süddeutsche Zeitung. Markus Kamieth, head of BASF, stated at a BDI conference that the reform of the EU emissions trading system (ETS), which limits CO2 emissions, could result in a situation where companies are unable to sell emissions allowances and must desperately seek them. He warned that without changes, the European industry could face significant issues and stressed the need for dialogue on the feasibility of the proposed reforms.
The ETS currently allows some emitters to trade freely allocated emissions allowances to make pollution reductions more efficient. The EU plans to eliminate these free allocations by 2026 (with no free allowances by 2034) and completely stop issuing new allowances by around 2039. This could lead companies to stockpile allowances ahead of time, causing substantial price hikes. Kamieth expressed doubts about the EU’s Carbon Border Adjustment Mechanism (CBAM), which imposes CO2 costs on imported products from 2026, stating that it might not adequately protect European industries due to insufficient carbon footprint reporting on imports.
Lanxess also expressed worries about the ETS changes, arguing that free allowances should continue until companies in Asia and America face similar costs for CO2 emissions, to avoid further damaging Europe's competitiveness. Dennis Grimm, of Thyssenkrupp, cautioned that CO2 emission prices must not rise faster than the industry can adapt, to ensure business viability and the adoption of climate-friendly technologies.
Germany’s environment ministry noted that certain industries, including chemicals and steel, likely won’t manage without new emissions allowances by 2040. Minister Carsten Schneider recently stated that terminating allocations in 2039 would be “too early.” Climate researchers like Ottmar Edenhofer from the Potsdam Institute for Climate Impact Research warn against diluting the ETS reforms, suggesting that companies could prepare for the post-2039 landscape by purchasing allowances in advance, while remaining emissions should be addressed through carbon removal strategies. Edenhofer advocated for a binding framework for negative emissions in the ETS instead of questioning the timeline and climate targets.
German industry leaders support the shift towards climate neutrality but are asking for significant financial and regulatory backing.
The ETS currently allows some emitters to trade freely allocated emissions allowances to make pollution reductions more efficient. The EU plans to eliminate these free allocations by 2026 (with no free allowances by 2034) and completely stop issuing new allowances by around 2039. This could lead companies to stockpile allowances ahead of time, causing substantial price hikes. Kamieth expressed doubts about the EU’s Carbon Border Adjustment Mechanism (CBAM), which imposes CO2 costs on imported products from 2026, stating that it might not adequately protect European industries due to insufficient carbon footprint reporting on imports.
Lanxess also expressed worries about the ETS changes, arguing that free allowances should continue until companies in Asia and America face similar costs for CO2 emissions, to avoid further damaging Europe's competitiveness. Dennis Grimm, of Thyssenkrupp, cautioned that CO2 emission prices must not rise faster than the industry can adapt, to ensure business viability and the adoption of climate-friendly technologies.
Germany’s environment ministry noted that certain industries, including chemicals and steel, likely won’t manage without new emissions allowances by 2040. Minister Carsten Schneider recently stated that terminating allocations in 2039 would be “too early.” Climate researchers like Ottmar Edenhofer from the Potsdam Institute for Climate Impact Research warn against diluting the ETS reforms, suggesting that companies could prepare for the post-2039 landscape by purchasing allowances in advance, while remaining emissions should be addressed through carbon removal strategies. Edenhofer advocated for a binding framework for negative emissions in the ETS instead of questioning the timeline and climate targets.
German industry leaders support the shift towards climate neutrality but are asking for significant financial and regulatory backing.