At the outset of the Iran war and resulting spike in energy costs, a gang of 10 countries led by Poland and Italy used the sensitive moment to demand major changes to the ETS. Initially, they were seen as a fringe band of nations who hadn’t taken decarbonization seriously enough, but their demands have begun to rope in more influential voices.
Just days ago, a similar group of 10 doubled down and issued a new letter to von der Leyen and pressured the Commission to weaken the ETS, in a clear sign they’re willing to be a blocking minority in the Council if new ETS legislation doesn’t satisfy them.
Polish Secretary of State Krzysztof Bolesta told POLITICO the letter shows the 10 countries are prepared for constructive ETS debates, but also described it as a “gentle reminder” that there is a “significant group whose weight cannot be ignored.” He added: “The bazooka is there in case we might need it at some stage.”
But the big question is where France and Germany fall on the issues. The two giants of the EU have previously avoided publicly denigrating the ETS, but the ongoing uncertainty around the Strait of Hormuz and U.S. tariffs have led them to quietly lean closer to the “dirties,” as one EU diplomat, granted anonymity to speak openly like others in this article, referred to the gang of 10.
“I think it’s more the French working and the Germans supporting them, than the other way around,” the diplomat claimed. “The French are much more active, and the Germans are following them […] But I think nobody now and nobody in the near future is questioning the ETS as a system as such… [needs] fine tuning.”
On the other side is a seven-country alliance of ETS-purists, led by Spain, Sweden and the Netherlands, who jointly published a letter demanding the Commission resists meddling with the current legislation and hold the course on the linear reduction factor. In perhaps a bad sign for the defenders of the ETS, three people familiar with that letter told POLITICO Germany pulled out from signing it at the last minute.
