Eurelectric urges EU lawmakers to keep ETS strong

Eurelectric is pressing the European Parliament to preserve a predictable, meaningful carbon market as lawmakers begin work on the European Commission’s ETS review on Oct. 1 in Brussels. The group says a stronger system is key to investment, industrial electrification and Europe’s competitiveness.

Why it matters: - Eurelectric wants EU lawmakers to keep the Emissions Trading System strong rather than dilute it during the Parliament’s review. - The group says a stable carbon price is needed to drive investment in decarbonisation and electrification. - Eurelectric argues the ETS remains one of Europe’s main tools to cut fossil-fuel use, reduce price exposure and support industrial competitiveness.

What happened: - Negotiations on the European Commission’s proposed ETS review began Oct. 1 in the European Parliament. - Eurelectric issued recommendations on what to keep, change and add to the proposal. - Lead negotiator MEP Peter Liese has called for compromise, and Eurelectric said its paper is meant to support that effort. - The organization is urging policymakers to preserve a predictable and robust carbon market.

The details: - Kristian Ruby, Eurelectric’s secretary general, said the power sector has driven 75% of emissions reductions across EU ETS sectors. - Ruby said the ETS has helped unlock investment in clean technologies and keep Europe competitive globally. - Europe’s power sector contributes about €220 billion a year to EU GDP. - The sector is expected to invest more than €5 trillion by 2050 in generation capacity and infrastructure for a decarbonised energy system. - Eurelectric says the European Commission’s July proposal already gives energy-intensive industries significant flexibility. - The group says that flexibility comes close to the limit of the EU’s 2040 climate target, including by fully accounting upfront for ETS sectors’ share of international credits. - Eurelectric says the system should be made more ambitious to preserve a meaningful carbon price and avoid penalizing front-runners. - Ruby said shifting away from fossil fuels is essential to reduce exposure to volatile fossil-fuel prices. - The group says the ETS is the most effective tool Europe has to drive that transition. - Eurelectric says three-quarters of industrial CO₂ emissions come from burning fossil fuels to produce process heat. - The group says much of those fuels are imported and cost the EU €450 billion in 2024. - Eurelectric estimates 60% to 90% of industrial energy demand could be directly electrified by 2035. - The group says ETS revenues could help direct investment toward industrial electrification and transformation. - Eurelectric says it has worked with industry representatives on electrifying industrial processes through the Antwerp Dialogues and a dedicated flagship project. - The group says ETS revenues and carbon-leakage protection tools should support industrial transformation, electrification and competitiveness. - Eurelectric says a successful transition must also be socially and geographically fair. - The group wants a people-focused ETS2 backed by strong enabling policies and adequate funding. - Eurelectric also wants the Modernisation Fund strengthened so all regions can participate in and benefit from the transition.

Between the lines: - Eurelectric is trying to shape the ETS debate before lawmakers settle on changes that could weaken the carbon price signal. - The pitch combines climate policy with industrial policy, arguing that electrification is both a decarbonisation tool and a competitiveness strategy. - The emphasis on ETS revenues and leakage protection shows the sector wants carbon-market money and safeguards to help industries adapt, not just pay more.

What's next: - EU lawmakers will continue negotiations on the ETS review in Parliament. - Eurelectric will push for a stronger carbon price, more support for industrial electrification and safeguards for a fair transition. - The outcome will help determine how closely the ETS aligns with the EU’s 2040 climate target and industrial policy goals.

The bottom line: - Eurelectric wants the EU to treat the ETS as a core investment signal, not a policy to soften during negotiations.