BRUSSELS — It was meant to be a debate on how to curb Europe’s soaring energy prices.
But the first session of talks at an EU leaders' summit in Brussels Thursday quickly descended into a three-hour fight over whether the EU should put a carbon price on driving cars and heating buildings.
The delay got so bad, the roast veal and fig tartlet lunch awaiting European leaders was driven well into the afternoon.
Countries including Italy, Poland, Czechia and Hungary called for ETS2 — an already-legislated law that will put a carbon price on heating and transport from 2028 — to be delayed for two more years. Estonia suggested it could be scrapped altogether.
The push was rejected by a majority of the bloc, with several EU diplomats telling POLITICO it was, as one put it, an “unacceptable” offer. Another said the ETS2 launch date would never be changed. But the debate reflects a growing sense from right-leaning governments that the EU’s ambitious green agenda runs against their push to bring down energy costs.
While the main topic of today’s discussion was ETS2, its predecessor, the Emissions Trading System — which puts a price on carbon emissions from factories and power plants — was arguably the real target.
Put together, these two emissions trading schemes will be the EU's most powerful policy tool for bringing down planet-warming emissions.
A proposed reform of the original ETS is currently being debated in the European Parliament and in the Council of the EU. Italy and Poland have been leading a gang of 10 member-countries which have been railing against the ETS since American and Israeli bombs started falling on Iran in March.
What they want is for the European Commission’s July review of the ETS to be further weakened, even though the proposal already softens carbon restrictions over the next decade to give industry more time to invest in cleaner production methods.
But by framing the ETS as a scourge on household bills, both Warsaw and Rome have found ready audiences at home and abroad. On Monday, hours before a meeting of EU environment ministers convened in Luxembourg, Poland led a meeting of member countries with concerns on the ETS. Their gang, which originally counted 10 countries in March, had now grown to 16.
While Italy and Poland did manage to get Czechia, Slovakia, Hungary and Greece to back their ask for a “reassessment of the ETS2” and to “further postpone its entry into force until at least 2030,” inside the room of European leaders the position mostly fell flat.
Five EU diplomats granted anonymity to discuss the ongoing negotiations said Nordic countries and the Netherlands were firmly against changes to ETS2 — a position backed by France and Germany.
But Paris and Berlin's long-term reliability as ETS defenders is in doubt. French President Emmanuel Macron and German Chancellor Friedrich Merz both face threats from the far-right, where the ETS has become a dirty word.
Germany’s far-right Alternative für Deutschland, which is no fan of the ETS, is politically ascendant, having won the largest share of votes in two regional elections in September. In France, with elections only months away in 2027, Marine Le Pen’s far-right National Rally is leading in the polls.
How Le Pen would deal with the ETS isn’t certain, but Jordan Bardella, the French far-right lawmaker and rising star of National Rally, offered a clue in recent comments.
“ETS: three letters, an acronym that reeks of detached bureaucracy, with one question that keeps coming up: who’s going to pay?” he said to European Parliament in May.
