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illuminem summarises for you the essential news of the day. Read the full piece on Euractiv or enjoy below:
🗞️ Driving the news: Germany, Europe's largest economy, is increasingly critical of the EU’s emissions trading system (ETS), which has been the cornerstone of the bloc's climate policy since 2005
• As the ETS system prepares for tougher regulations, industry leaders and politicians in Germany are voicing concerns that it may undermine the country’s business competitiveness
🔭 The context: The ETS has long been successful in linking emissions reductions with economic growth in the EU, lowering emissions while allowing GDP to increase
• The system caps emissions from power plants and industrial sectors, requiring operators to buy allowances for their CO2 emissions
• However, the shift to a stricter ETS, including the end of free carbon certificates for industries, has triggered alarm among some German political and business figures, who fear it could harm the country’s industrial base
🌍 Why it matters for the planet: The European ETS has been heralded as one of the most effective tools in global climate policy, successfully reducing emissions in the EU while supporting economic growth
• However, the planned tightening of the system raises concerns about potential economic impacts, particularly for energy-intensive industries like chemicals and manufacturing
• As Germany voices its opposition, the debate over carbon pricing and its potential impact on industry competitiveness could influence broader EU climate policy decisions
⏭️ What's next: As the ETS prepares for stricter regulations, including the end of free emissions allowances for industries, Germany’s industrial sectors are likely to continue pushing back
• The country's leadership seeks to balance its commitment to EU climate goals considering the concerns of its business community, particularly sectors that may struggle with higher carbon costs
• This growing tension could impact the future direction of carbon pricing policies across Europe
💬 One quote: "The ETS system feels like a lead vest," — CEO of a German chemical industry company
📈 One stat: Since 2005, the EU's ETS has reduced emissions by around 1 billion tonnes per year, while the EU’s GDP has grown significantly
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