EU leaders debated rising energy prices and the role of the bloc's emissions trading system (ETS) on Thursday, 19 March but remain divided over how exactly to adjust EU climate policy.
Spanish prime minister Pedro Sanchez expressed strong support for the ETS. Pointing to Spain's low power prices, he said some governments are using the energy crisis to try to weaken climate policies. Finland's prime minister Petteri Orpo similarly called for the bloc to continue decarbonising, also noting Finnish clean energy investments pushing down the country's energy prices.
Dutch prime minister Rob Jetten said he supports refining climate policies but will not scrap those crucial to long-term green resilience, highlighting that the ETS has saved "billions and billions" in fossil fuel imports.
"The ETS, particularly ETS 1, is a good mechanism because it allows transition while preserving competitiveness," French president Emmanuel Macron said. But Macron is also calling for "flexibility" and "adaptability" in the current situation. The ETS 1 is operational and covers energy-intensive industry, power, maritime and aviation emissions, while the EU ETS 2 covering road transport and buildings is due to launch in 2028.
The European Commission has incorporated large parts of proposals worked out with EU leaders in February, German chancellor Friedrich Merz said. Commission president Ursula von der Leyen earlier this week wrote to EU leaders announcing a proposal to increase the "firepower" of the market stability reserve (MSR), which could release ETS allowances to address "excessive" price volatility and "keep prices in check" in the short term. And von der Leyen now promises that the upcoming ETS revision, scheduled for July, will set out a "more realistic" decarbonisation trajectory beyond 2030.
Swedish prime minister Ulf Kristersson said Sweden's low gas dependence shields it from price shocks. Kristersson added that it is "unacceptable" that other countries with transmission problems should now lay claim to Sweden's "large" congestion revenues. "We use these to expand the grid, but also to compensate Swedish electricity consumers," he said.
Czech prime minister Andrej Babis said his country is among the "best" in terms of decarbonisation. Babis joined leaders from Austria, Bulgaria, Croatia, Greece, Hungary, Italy, Poland, Romania and Slovakia stating in a letter to the commission and European Council that the ETS pathway to 2034 is "too steep and overly ambitious".
One of the 10 leaders, Austrian chancellor Christian Stocker, also wants the gas price "excluded" from ETS allowances. "This would also lead to a reduction in costs, and that is something our industry urgently needs," Stocker said. He also called for the merit order system setting power prices to be changed. "We generate around 90pc of our annual consumption from renewables, yet we pay the price for electricity as if it were produced by gas-fired power plants," Stocker said.
