Europe must be open to reviewing the carbon market – Merz

This instrument should not hinder the green transition of industry

The European Union should be open to revising or postponing its carbon market if it does not contribute to the transition of industry to clean production. This was stated by German Chancellor Friedrich Merz, according to Bloomberg.

The agency notes that this issue is currently at the forefront of the bloc’s agenda, as the European Commission seeks to reform this instrument. It has been criticized at the European Industry Summit in Antwerp for high carbon prices that undermine the competitiveness of companies in various sectors.

Germany already made it clear last year that it would seek to relax emissions rules for its most polluting industries. At the industrial summit, Merz said that the European Emissions Trading System (EU ETS) was created to reduce carbon emissions and at the same time to help companies covered by it in the “green” transition.

“So if that cannot be achieved, and if it is not the right instrument, we must be very open to revising it or at least postponing it,” Merz said.

He added that this had already been done with ETS2 (a new market covering emissions from buildings and transport).

Governments are now ready to slow the pace of pollution reduction and consider measures that would ease the burden on industry, EU policymakers and diplomats familiar with the matter told Bloomberg earlier.

The EU is reviewing its long-standing partnership with the US, trying to prevent growing competition from China, and seeking to increase defense spending after Russia’s invasion of Ukraine. So, the broad consensus on climate action is giving way to policies that prioritize reducing energy costs.

As Friedrich Merz noted in Antwerp, he fully agrees with those who advocate for more action to combat climate change and those who talk about finding the right tools, but this is unacceptable at the expense of industry and jobs in it.

“And that’s why I agree with everyone who says that if this is not the right tool, we need to talk about it and change it,” he said.

The Commission, the EU’s regulatory body, is expected to present its proposal for reforming the carbon market in the third quarter of 2026.

It should be recalled that business leaders have called on the European Union to take urgent action to preserve industry, among the measures they emphasize are reducing energy and carbon costs.