European Commission President Ursula von der Leyen rejected Poland's call for a temporary suspension of the EU's Emissions Trading System (ETS) to stabilize electricity prices.
Polish Prime Minister Mateusz Morawiecki called for this at the energy summit in Copenhagen, reports EURACTIV.
“Why add another €90 or €100 in the form of ETS allowances to already very high electricity prices? We can revert back to the system the moment we secure energy for all of Europe and we bring back peace to Ukraine,” Morawiecki said at a news conference.
The ETS is considered as the cornerstone of the EU’s climate policy. By forcing power plants and industries to buy permits when they produce CO2 emissions, it provides a financial incentive to pollute less, to dodge the carbon costs.
This affects the cost of electricity.
However, von der Leyen noted that ETS costs are only around 6% of the price of electricity, compared to the 94% caused by other factors, including the sharp rise in the price of gas. However, the EU is working on an extraordinary instrument and structural reform of the electricity market.
“We need the emission trading system to cut CO2 emissions,” von der Leyen said at the same news conference.
In 2021, as the energy crisis unfolded, Poland was the first EU country to call for the ETS to be suspended, blaming the scheme for high electricity prices. The Czech Republic has stated that it is ready to support this step.
“The price increase on the ETS is out of control and hitting the household budgets of EU citizens,” Moravetskyi said, calling for some form of price regulation on the EU carbon market.
In February, Polish state-owned utility PGE launched an advertising campaign blaming the ETS for the country’s high energy prices.
The material noted that higher energy prices have actually pushed up the price of CO2 allowances in the ETS, as polluting coal becomes more competitive with gas. However, according to the Polish think tank Forum Energii, the price impact of the ETS amounted to 23% of Polish household bills.
Earlier, EcoPolitic wrote, that Poland calls on the European Union to suspend and reform the quota trading scheme on emissions.
As EcoPolitic previously reported, MEPs restored climate laws by creating interim agreement on ETS and CBAM, which will be submitted for a new vote at the plenary session.
