EU industry urgently needs instruments like ETS innovation fund to avoid de-industrialisation
(6 December 2022) - EU industry is confronted with a momentous decarbonisation challenge and urgently needs instruments like the ETS innovation fund to implement low-carbon solutions and build business models around those.
In light of the upcoming trilogues on ETS/RePowerEU, BusinessEurope Director General Markus J. Beyrer said: "European industry is facing multiple fundamental challenges on its decarbonisation pathway. The dramatically high energy prices, together with the gap in climate targets between the high ambition of the EU and those of other actors is undermining European industry’s competitiveness so drastically that de-industrialisation is happening as we speak, with the ever-larger risk of temporary plant closures becoming permanent. In addition, the Inflation Reduction Act (IRA) and its associated subsidies create a real risk of low-carbon investments being moved from the EU to the U.S. instead. In this precarious moment, it is essential that the EU improves the investment climate for industry decarbonisation.
However, EU finance ministers at the moment are trying to do the exact opposite: by proposing to re-dedicate funds intended for the ETS Innovation Fund to finance the expenditures of RePowerEU, the Council is suggesting to largely deactivate one of the few instruments dedicated to support innovative low-carbon solutions being developed and deployed by the industry in the EU. In the upcoming trilogues, Finance Ministers must let go of this idea and instead return to the original Commission proposal, which would have made use of the flexibility inherent in the ETS’ Market Stability Reserve."