CPB: EU climate rule relaxations may increase emissions

An analysis by the Netherlands Bureau for Economic Policy Analysis (CPB) suggests that proposed relaxations to the European Union's Emissions Trading System (ETS) could lead to significantly higher carbon emissions. The European Commission's proposals include slowing the reduction of the emissions cap and ceasing the cancellation of surplus emission rights. According to the CPB, these changes could result in up to 33 percent more emissions by 2050 compared to current regulations, as cheaper emission costs may discourage industrial investment in clean technologies.

Furthermore, the CPB notes that these measures offer minimal relief for European industrial energy costs. While natural gas costs might decrease by approximately 2 euros per megawatt-hour, this represents only a 3 percent reduction, which is insufficient to offset recent price surges. The report suggests that direct reductions in energy or production costs, such as lowering electricity taxes, would be more effective for maintaining industrial competitiveness.