Polish President Karol Nawrocki brought to the attention of Prime Minister Donald Tusk his position that the EU should abolish the emissions trading system (ETS) in order to reduce costs and prevent the outflow of industry from the bloc. Tusk is due to meet with other EU leaders to discuss the ETS in Brussels on Thursday, Kallanish said.
The current heads of state and government of Poland belong to different political parties and rarely agree. Although Tusk is not obligated to follow Nawrocki's example, the president has the right to propose laws and veto them.
In 20 years, the EU has reduced CO2 emissions by almost 35%, amounting to about 2.4 billion tons, but emissions have increased globally, helped by China, Deputy Secretary of State in the Office of the President Karol Rabenda said during a press conference earlier this week.
The EU's share of industrial production dropped to 17%, while China's share rose to 28%, indicating that ETS is "not reducing industrial production, but promoting it to other regions of the world," he added.
If the majority required to cancel the ETS cannot be obtained, the Polish President suggests alternative solutions, including the payment of a so-called replacement fee to the budgets of individual member states. In the meantime, the market stability reserve should be adjusted to ensure that additional quotas for ETS can be introduced when their price exceeds 10 euros per ton.
Financial institutions "that do not contribute to decarbonization in any way" should also be excluded from trade privileges, explained Presidential Adviser Wanda Book. Finally, free surcharges should be retained, because "CBAM does not work – it does not cover the entire supply chain, and it can be easily circumvented," she added.
According to press reports, European Commission President Ursula von der Leyen addressed EU heads of government this week with a proposal to limit ETS prices and send subsidies to less affluent members. This would include using the market's stability reserve to contain prices.
Representatives of various steel companies have recently called for the extension of free ETS discounts, including the Italian Steel Association Federacciai, voestalpine and Moravia Steel (see separate article). The situation is becoming the subject of even closer attention, as the escalation of the Middle East conflict has led to an increase in energy prices.
Author: Adam Smith Austria
Kallanish.com
