The Czech Republic has urged the European Union to reform its carbon market framework by capping carbon allowance prices and postponing the expansion of the EU Emissions Trading System (ETS 2), citing rising concerns over industrial competitiveness.
According to a report by Reuters, Czech Prime Minister Andrej Babiš outlined the proposal in a letter sent to EU leaders ahead of a competitiveness-focused meeting. He warned that persistently high carbon prices are driving up energy costs and increasing the risk of industrial production relocating outside the EU.
Proposal targets ETS 2 delay until at least 2030
The Czech government has specifically called for delaying the implementation of ETS 2 until at least 2030. ETS 2, which would extend carbon pricing to buildings and transport, is currently scheduled to begin in 2028, following an earlier postponement from 2027.
Babiš argued that limiting sharp increases in carbon prices would help preserve industrial activity while maintaining the EU’s broader climate policy objectives.
Carbon pricing remains central to EU climate strategy
Launched in 2005, the EU ETS remains the cornerstone of the bloc’s climate policy, requiring industrial emitters and power producers to purchase allowances for each metric ton of CO₂ emitted. Revenue from allowance auctions is redistributed to member states and supports climate and decarbonisation programs.
As of February 2, carbon allowance prices were trading at around €81 per metric ton, after reaching approximately €90 per metric ton earlier in January.
Diverging views among EU member states
Several countries, including Poland, have expressed concerns that financial speculation may be contributing to elevated carbon prices, potentially undermining industrial competitiveness. Other EU members continue to support a strong carbon price signal, arguing it is essential for accelerating decarbonisation and meeting long-term climate targets.
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