Sweden Vows to Block EU Climate Scheme Dilution

BRUSSELS — Sweden has vowed to block any effort to dilute the EU's proposed decarbonization scheme ahead of a policy showdown next week that is pitting capitals against each other.

Speaking to POLITICO, Swedish Minister for EU Affairs Jessica Rosencrantz said her country "will fight to keep the Emissions Trading System strong" in the face of a growing coalition of countries that want to see the rules relaxed.

"As some member states push to weaken Europe’s most effective climate instrument, our position is clear: we will oppose any attempt to water down the system," she said.

The ETS, a cap-and-trade scheme designed to reduce the emissions of the EU’s most polluting industries by making them pay for each ton of carbon they emit, is subject to a review by the European Commission which is slated for release by President Ursula von der Leyen's top team on July 17.

Ten of Europe's largest economies — including Poland, Italy, Czechia and Austria — are publicly campaigning for the policy to be gutted, arguing it harms industry and drives up bills.

However, according to Rosencrantz, "a weaker ETS would be bad for the climate and bad for Europe’s competitiveness. Companies that have invested billions in the green transition should not be undercut because others want to lower the bar."

Ireland, which took over the EU's agenda as part of its six-month rotating presidency of the Council of the EU at the beginning of June, will now have to negotiate a compromise on the file.

According to a letter obtained by POLITICO, Sweden has written to Ireland's Europe Minister urging him to ensure "predictability" by maintaining the current ETS rules, including waste incineration in the framework, and bringing ships of above 400 gross tons into the scheme.

Spain, Finland, the Netherlands, Portugal, Luxembourg and Sweden have all signed up to a joint campaign with Finland to protect the ETS in its current version.