Cefic warns EU emissions trading reforms could speed up deindustrialisation

The European Chemicals Industry Council (Cefic) has sounded the alarm over proposed reforms to the EU Emissions Trading System (ETS), arguing that the current trajectory risks accelerating industrial decline across Europe. In a statement issued on 30 June, Cefic president Markus Kamieth warned that the chemical sector has already shed around 10% of its production capacity since 2022, with further restructurings and insolvencies looming. “Europe cannot succeed in its green transition if it weakens the industrial base that has to deliver it,” Kamieth stated, calling for a fundamental overhaul of the ETS framework before 2030. The association criticised the 2026–2030 ETS benchmark updates as “largely excessive and unrealistic,” arguing they fail to account for industrial realities, global competition, and the slow pace of enabling infrastructure development. Kamieth highlighted the lack of progress in expanding electricity grids, low-carbon energy access, and market demand for low-carbon products as key risks for carbon leakage. He stressed that the ETS must support emission reduction without imposing “impossible choices” on companies, such as forcing investments in technologies that are not yet economically viable or supported by markets. “Companies should not be pushed to invest in technologies that are not yet feasible at scale, economically viable or supported by markets – while facing reduced free allocation and rising carbon costs,” he said. Kamieth emphasised that the ETS alone cannot drive industrial transformation without the right conditions, including affordable low-carbon energy, necessary infrastructure, and functioning markets for low-carbon products. “Without these, tightening the ETS risks becoming a cost driver rather than a transition driver,” he warned. The Cefic president concluded that the system’s objective must be clear: to drive industrial transformation in Europe, not deindustrialisation.