EU ETS Reform and German Industry Job Losses amid Energy Crisis

The European Commission has presented a reform of the EU Emissions Trading System (ETS) to align the scheme with higher energy prices, competition from China and the United States, and the EU’s 2040 climate target of a 90 % emissions reduction. The proposal includes extending the ETS to fuels such as gasoline and natural gas from 2028 and revising the market‑stability reserve to better control certificate supply.

German industry is confronting a sharp downturn caused by soaring energy costs, weakened global demand, and intense foreign competition. Analysts warn that the automotive sector could lose up to 726 000 jobs by 2040, with Volkswagen alone facing the prospect of 140 000 positions at risk. A broader study cites roughly 177 000 industrial jobs lost in 2025, driven by weaker Chinese demand, higher interest rates, and the shift toward electric vehicles, automation, and digitalisation.

Regional responses are emerging. In the Kreis Steinfurt, the nonprofit energieland2050 e.V. promotes local renewable projects and aims for climate neutrality by 2040. Brandenburg’s Minister‑President Dietmar Woidke is advocating “electricity price zones” that could lower rates to as little as five‑cent per kilowatt‑hour, especially for energy‑intensive manufacturers, and is exploring cross‑border trade with Poland. Austrian experts also stress wind power as a cornerstone of a resilient, domestically‑sourced energy system.

Consumers face persistently high electricity tariffs, prompting advice to compare suppliers and switch where possible, while political figures such as Economy Minister Robert Habeck warn of further heating‑cost spikes. The combined policy reforms, industrial challenges, and regional initiatives shape Europe’s transition toward a lower‑carbon, more competitive economy.