POLITICO: ‘The week the EU’s local weather foundations began to shake’ – ‘An assault on Europe’s most significant local weather regulation, the Emissions Buying and selling System’

BRUSSELS — Last week, the very foundations of the European Union’s climate efforts started creaking under pressure.

For months, European capitals have attacked the bloc’s environmental policies, arguing onerous green rules were strangling their economies. But the EU’s single biggest weapon for slowing global warming remained off-limits.

That taboo was broken last week at two back-to-back summits focused on curing the continent’s economic malaise, as leaders argued high carbon prices under the EU Emissions Trading System (ETS) were a worrying symptom that needed to be remedied.

While some of Europe’s top politicians rushed to the defense of the ETS, many jumped at the chance to bash the system. Notably, German Chancellor Friedrich Merz positioned himself in favor of far-reaching reforms, though he backtracked somewhat later.

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So far, policymakers have tinkered with green legislation that sets reporting rules for companies or sub-targets for specific sectors such as cars — but not the load-bearing pillars.

This year, however, these pillars are up for review. The European Commission will propose revisions to underlying green governance rules, national emissions targets and carbon absorption goals after the summer, and by July has to reassess the ETS.

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Even if some, like Merz, have rowed back on their comments, “the damage is done,” Ferdinand said. “The market lost around €10 over a very short period of time. This is clearly a sign of eroding confidence in the system’s long-term stability.”