The appeal comes ahead of the Commission’s planned presentation on Friday of a draft EU ETS reform. The joint position was signed by Bulgaria, Cyprus, Czechia, Estonia, Greece, Hungary, Italy, Poland, Romania and Slovakia.
In a joint position, the countries say any changes should help restore the competitiveness of European industry, give companies greater predictability and take national energy security into account.
Allowances could run out around 2039
The EU ETS has been in place since 2005 and covers about 40 percent of the EU’s carbon dioxide emissions. It applies to more than 11,000 electricity producers, energy-intensive industrial sites, airlines and ships.
For every tonne of carbon dioxide emitted, a company must surrender one allowance. At present, 57 percent of allowances are sold at auction, while the remaining 43 percent are allocated to industry for free.
One of the key issues expected in the reform is how many allowances will remain available after 2030. If the current reduction pace is maintained, the pool would shrink to the point of being exhausted around 2039.
The European Commission therefore intends to adjust the annual reduction rate so that allowances would still be available in the 2040s. The reform is also expected to result in free allocations covering 78 percent of industrial emissions.
Warning over production moving outside the EU
The signatories argue that rules aimed at near-complete decarbonisation of power generation and industry by 2039 could accelerate the relocation of production beyond the European Union.
They therefore want free allowances to remain in place for industry as a tool to prevent so-called carbon leakage, where manufacturing shifts to non-EU countries with lower climate-policy costs.
They also want the EU ETS to better reflect differences between member states, including national energy mixes and gross domestic product per capita. The same criteria, they add, should be used when distributing funds for the energy transition.
More predictable carbon prices
Another demand is to increase the predictability of allowance prices. The countries say the carbon price should be less exposed to speculative activity and remain at a level that does not undermine the global competitiveness of European companies.
They also raise a separate point on maritime transport, calling for adjustments so that higher costs do not trigger a shift in transhipment from EU ports to ports outside the bloc.
Such a shift would not only reduce traffic through European terminals, they argue, but could also dilute the impact of climate rules if ships increasingly chose ports in third countries.
ETS2 back on the table
The group is also asking for a fresh review of ETS2, which is set to cover emissions from buildings and road transport. Its launch has been delayed until 1 January 2028.
According to the authors, the current economic and geopolitical situation does not justify imposing new costs on European households. The demand may also matter for the transport and logistics sector, because bringing road fuels into the emissions trading system would translate into higher vehicle operating costs.
