EU climate policy and ETS face scrutiny over industrial energy costs

The European Union's climate agenda and the Emissions Trading System (ETS) continue to face scrutiny regarding their economic impact on industry and energy costs. Recent communications from European Commission President Ursula von der Leyen emphasize a commitment to electrification and the transition toward renewable energy sources, nuclear power, and biomethane to combat the energy crisis.

In Poland, concerns have been raised regarding the heavy burden of the ETS, with the vice president of the Polish Group of Energy noting that ETS costs account for an average of over 50 percent of energy prices for enterprises.

While the European Commission has proposed adjustments to the ETS—such as lowering the Linear Reduction Factor (LRF) and providing more free emission allowances for certain sectors to ease the transition—critics argue these measures may still be insufficient or create unsustainable pressure on the industrial sector. Current proposals suggest extending the decarbonization horizon for covered plants by approximately 10 years, moving the end of the current system toward 2050.