MINEX Forum

Tag: Energy Prices

  • EU Divided as 10 Countries Push to Reform Carbon Market Ahead of Summit

    EU Divided as 10 Countries Push to Reform Carbon Market Ahead of Summit

    A growing rift has emerged within the European Union over climate policy, as ten member states call for urgent reforms to the bloc’s Emissions Trading System (ETS), warning that current rules risk undermining industrial competitiveness.

    In a joint letter addressed to the European Commission ahead of a key European Council summit in Brussels, leaders from Austria, the Czech Republic, Croatia, Greece, Hungary, Italy, Poland, Romania and Slovakia argued that the existing ETS framework poses an “existential risk” to strategic industries. The countries are urging a slower and more flexible transition to balance climate ambitions with economic stability.

    The ETS, the EU’s flagship carbon market, requires companies to pay for their emissions but currently provides a limited number of free allowances to ease the burden on industry. The signatories are calling for these free allowances to be extended beyond 2034 and for the planned phase-out, set to begin in 2028, to be slowed.

    They argue that rising energy prices, persistent inflation and the high cost of decarbonisation technologies are placing heavy strain on energy-intensive sectors such as steel, chemicals and manufacturing. Without adjustments, they warn, European industries could struggle to remain competitive globally.

    The letter also calls for measures to reduce volatility in carbon prices, enabling businesses to better plan long-term investments, and for action to prevent excessive electricity costs, which are increasingly linked to natural gas prices.

    The appeal comes at a politically sensitive moment, as EU leaders prepare to discuss energy security challenges exacerbated by geopolitical tensions, including the conflict in the Middle East. The debate highlights a broader struggle within the bloc to reconcile climate targets with economic resilience.

    European Commission President Ursula von der Leyen has defended the ETS, describing it as a cornerstone of the EU’s climate strategy and a key mechanism for driving investment into clean technologies. However, she acknowledged the complexity of reforming the system, noting that electricity pricing is influenced by multiple factors, including national taxes, grid costs and energy market structures.

    The push for reform is not universally supported. A separate group of countries, including Denmark, Finland, the Netherlands and Sweden, has called for the ETS to remain unchanged, arguing that it has been effective in reducing emissions, supporting cross-border electricity trade and generating significant economic benefits.

    With competing positions emerging, EU policymakers face mounting pressure to deliver a compromise. The ten countries have urged the Commission to accelerate its review of the ETS and present concrete proposals within weeks, rather than waiting until the scheduled review later in the year.

    The outcome of the upcoming summit is expected to shape the future direction of Europe’s climate policy and its impact on industrial competitiveness.

  • Heavy Industry Issues “Code Red” for Europe: Urgent Call to Halt 2026 Carbon Cost Hikes

    Heavy Industry Issues “Code Red” for Europe: Urgent Call to Halt 2026 Carbon Cost Hikes

    BRUSSELS – In a major intervention aimed at the highest levels of EU governance, Euromines and a coalition of Europe’s energy-intensive industries (EIIs) have issued a stark warning: without immediate policy intervention, the continent faces “irreversible deindustrialisation.”

    The joint statement, released on 2 February 2026, comes at a critical juncture for European manufacturing. Highlighting a “deteriorating fast” situation, the industry group revealed that production levels in some sectors plummeted by as much as 40% in 2025.

    Key Alarms: A Sector in Retreat

    The coalition, representing a turnover of €1.5 trillion and 6.6 million employees, argues that the backbone of Europe’s strategic autonomy—including steel, cement, chemicals, and mining—is crumbling under three main pressures:

    • Sky-High Energy: Costs remain twice as high as pre-crisis levels.

    • Crushing Carbon Prices: CO2 prices are now roughly four times higher than in 2020, far outpacing international competitors.

    • Global Trade Headwinds: Unfair trade practices, exacerbated by aggressive US tariffs and state-induced global overcapacities, have left European firms unable to compete.

    “In 2025 alone, an estimated 200,000 jobs were lost in these sectors. This is a critical situation at a time when self-sufficiency is becoming increasingly important,” the statement warns.

    The “Four Pillars” of Survival

    As EU leaders prepare for an informal summit on competitiveness on 12 February, the industry is demanding a “Clean Industrial Deal” with four immediate priorities:

    1. Freeze Carbon Cost Hikes: A total pause on any planned increases in carbon costs for 2026. The group warns that upcoming reductions in “free allocations” could slash support by up to 34%, a move they label “detrimental.”

    2. Target €50/MWh Energy: Aligning with the landmark Draghi Report, industries are calling for all levers to be pulled to bring industrial electricity costs down to €50/MWh to make electrification viable.

    3. Aggressive Trade Defense: Rapid deployment of Trade Defence Instruments (TDIs) to counter “economic coercion” and non-EU imports produced under lower environmental standards.

    4. “Proudly Made in Europe” Demand: New rules in public procurement to prioritise European-made products, ensuring that the EU’s high environmental and social standards are reflected in market demand.

    Looking Ahead

    The timing of this statement is no coincidence. It serves as a direct “input” for the 12 February retreat at Alden Biesen Castle, where European Council President António Costa has invited former Italian PMs Mario Draghi and Enrico Letta to discuss a radical overhaul of the Single Market.

    With carbon prices projected by some analysts to reach €100/t in early 2026, the industry’s message is clear: Europe cannot afford to pay for tomorrow’s climate goals by bankrupting today’s industrial base.