FRANKFURT (dpa-AFX) - The German chemical industry is exerting pressure on Chancellor Friedrich Merz ahead of a comprehensive revision of the EU Emissions Trading System (ETS). In a letter addressed to Merz, Markus Steilemann, President of the chemical industry association VCI, warns that proposed new requirements governing the allocation of free emission allowances exceed the industry's capacity for transformation. 'This significantly increases investment risks and undermines the international competitiveness of Germany and Europe as industrial hubs,' Steilemann writes.

While amendment proposals presented by the EU Commission in May offer selective improvements, the letter, seen by dpa, states that broad-based relief for the chemical industry remains elusive. 'Overall, the threat of additional burdens in the mid-triple-digit million euro range per year persists for the German chemical industry alone.'

Emissions Trading Under Review

Emissions trading serves as the EU's primary climate policy instrument on the path toward climate neutrality by 2050. Under this system, companies must hold permits for the emission of greenhouse gases such as carbon dioxide (CO2). These permits can be traded as needed, providing an incentive for energy-intensive sectors to reduce emissions. This mechanism establishes a price for every ton of CO2 emitted. Over time, the number of available certificates is reduced, aiming to drive climate protection in an efficient manner.

A fundamental revision of the ETS is scheduled for this summer, with the Commission expected to present its proposal in July. Germany has advocated for minor adjustments, particularly regarding the determination of how many free certificates industrial plants may receive.

Environmentalists Alarmed

The chemical lobby criticizes the fact that setting these volumes, which will apply retroactively from 2026 to 2030, forces short-term cost decisions that lead directly to increased burdens for the sector. Meanwhile, negotiations on the fundamental rules of emissions trading and its other components are expected to be time-consuming.

Furthermore, the VCI argues that requirements should not be tightened because key prerequisites are missing - such as adequate grid connections, competitive electricity and hydrogen costs, and a functioning infrastructure for hydrogen and CO2. In his letter, Steilemann asks Merz to lobby the Commission for a suspension of the stricter measures.

The struggling chemical industry, a major consumer of electricity and gas, has long been calling for relief from Brussels regarding emissions trading. As early as January, VCI President Steilemann and IG BCE Chairman Michael Vassiliadis had approached EU Commission President Ursula von der Leyen. Conversely, climate activists warn against weakening the system, fearing detrimental impacts on the environment./als/rdz/DP/zb