EU leaders clash over carbon market rules at Brussels summit
The Emissions Trading System was a core friction point, with Nordic nations warning against weakening it while others blamed it for high costs.
BRUSSELS — European Union leaders clashed over the future of the bloc's carbon market during a summit in Brussels on Thursday and Friday.
In lengthy debates, the leaders of Finland, Denmark and Sweden faced off against the four-nation Visegrad group of Hungary, Slovakia, the Czech Republic and Poland, with Italy and Greece also backing the Visegrad position.
Finland, Denmark and Sweden warned that watering down the Emissions Trading System (ETS) would undermine investment in clean technologies.
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"Any weakening of the ETS would undermine the predictability on which investment decisions depend and risk slowing the pace of industrial decarbonisation," reads a letter from the three countries seen by Euronews.
But Czech Prime Minister Andrej Babis sharply attacked the ETS and carbon taxes.
"Someone is making billions at the expense of the European industry, which is in decline and which of course has major problems," Babis told reporters on Thursday.
He said EU climate policies are "ideological stuff" that ignore economic realities and argued the system rewards financial gamblers while punishing traditional manufacturing.
The ETS makes companies pay for their pollution, with the dual aim of reducing emissions and encouraging investment in sustainable alternatives.
Since its onset in 2005, emissions covering affected industries have dropped by 51%, according to the European Commission.
EU countries are using the current geopolitical shock as leverage to recalibrate carbon market rules, depending on their national energy mixes.
Fossil-heavy nations are pushing for lower carbon price pressures, while green-forward nations demand steadfast transition timelines.
The Nordics argue that cutting ambition would also "shift the burden of emission reductions to other sectors of the economy" where mitigation options are more difficult.
"This is not a new issue, but the current situation gives renewed urgency to the debate," one EU diplomat said.
"(The ETS) has played an important role in decarbonisation. We must now maintain the price signal and ensure the scheme continues to function by implementing corrective measures," a second EU diplomat told Euronews.
EU leaders invited the European Commission to examine further short-term interventions and urged lawmakers to accelerate work on the Market Stability Reserve, a mechanism aimed at limiting carbon-market price volatility.
Push to delay new carbon market fails
A plan by the four Visegrad countries, backed by Italy and Greece, to delay a new version of the Emissions Trading System until 2030 has hit a wall.
The four countries argued that households and small businesses will inevitably face higher costs and that "price differences between the EU regions and EU countries are enormous", particularly in Eastern Europe.
The ETS2 is the new carbon market set to cover fuels used in road transport and buildings as of 2029.
Despite the concerns raised by the six countries, one EU diplomat told Euronews that the proposed amendments "would never get the required unanimity".
"There is little support for it and they know it. That's why they try it at the European Council instead of the Environment Council because there's no majority there for this," another diplomat said.
Nonetheless, the six countries succeeded in requesting an impact assessment to determine its design and safeguards, which the Commission will handle.
The climate tool was already delayed once over concerns about its social impact on the most vulnerable, as the mechanism will inevitably increase energy bills further.
With files from Yahoo News