The European Emissions Trading System EU ETS remains a key instrument for achieving climate neutrality. However, the European Commission’s proposed ETS1 revision must better reflect the economic and technical realities of industrial decarbonisation. In our position paper we call for free allocation without new conditionalities to maintain effective carbon leakage protection. Realistic benchmarks and predictable market conditions are needed to ensure that climate ambition can go hand in hand with industrial competitiveness and a resilient European economy.

The BDI considers the EU ETS1, also beyond 2030, to be the key market-based instrument for achieving climate neutrality. European industrial competitiveness is under serious threat, and any revision of the Emissions Trading System must take this reality into account. The revision must be fair both to those who have already invested in decarbonization and to those who want to decarbonize but are currently unable to do so due to a lack of infrastructure and economically viable solutions.