Czechia and five EU states urge Brussels to shield industry from carbon costs

Six EU member states, including the Czech Republic, have called on the European Union to protect their heavy industry from costs linked to carbon emissions. According to them, climate policy must reflect the new reality, especially current geopolitical crises and extremely high energy prices. In a so-called non-paper the countries call, for example, for maintaining the current level of free allocation of emission allowances that allow industrial companies to emit within the EU ETS system.

The emissions trading system (ETS) is designed to incentivise companies to reduce emissions. Companies must buy allowances for every tonne of CO₂ they emit. The higher the emissions, the higher the costs, which encourages investment in cleaner technologies. European Commission President Ursula von der Leyen has previously said that the ETS remains a “proven tool for supporting industrial transformation”, but that it needs to be modernised and made more flexible.