German Chancellor Friedrich Merz has strongly criticized the current European emissions trading system, EU ETS. As a result of his statements, the flagship European carbon price fell to a five-month low.
This was reported by Montel News.
During his speech at the European Industrial Summit in Antwerp, Friedrich Merz condemned the EU ETS. In his opinion, its main task is not to generate new revenue, but to reduce carbon dioxide emissions.
If the ETS is unable to fulfill its goal of decarbonizing Europe, it should "be very open to revision or at least postponement." The German chancellor was referring to postponing the implementation of ETS 2 by one year, until 2028.
The politician's position contrasts sharply with the opinion of European Commission President Ursula von der Leyen, which she previously expressed at the same event. She publicly defended the current ETS system.
How did the markets react?
Following Merz’s remarks, as of the morning of February 12, the flagship carbon market price fell sharply. The EUA contract for December 2026 dropped by €5.79 to €72.66 per tonne. Earlier in the day, it had reached an intraday low of €72.40 per tonne. According to Ice Endex, this is the lowest level since August 29.
"Traders perceived [Merz’s] comments as a political risk to the integrity of the EU ETS, which triggered a sell-off at the open," noted the consulting company ClearBlue Markets.
EcoPolitic had earlier reported that the European Parliament supported the postponement of ETS2 implementation until 2028.
Earlier, the European Investment Bank, together with the European Commission, launched a special ETS2 Advance Financing Mechanism. In this way, the EU plans to smooth the introduction of the Carbon Border Adjustment Mechanism for the building and road transport sectors.
