Sánchez sent the paper to European Council President António Costa on Thursday, just as Italy launched a blistering attack on the ETS. Rome called for its suspension until after the reform is completed, claiming that the carbon price is driving up energy costs and acting as a “tax” on manufacturers.
The Spanish paper takes the opposite view. “Dismantling the emissions trading system is the wrong answer to high energy prices,” the paper reads. “While some adjustments to the current system to reduce [price] volatility could [be] welcome, a misguided and rushed reform would risk distorting the price signal it has successfully been sending without bringing competitiveness gains.”
Madrid joins Sweden in defending the system, which regulates around half of the bloc’s emissions and has successfully slashed pollution in half since 2005.
In general, Spain writes, “we must advance and accelerate, not dilute, the green agenda. This is not just a moral imperative, but a lever for sustained, long-term competitiveness … Any slowdown in decarbonisation would play directly into our competitors’ hands.”
Madrid also positions itself against demands to further put off the introduction of a second ETS governing heating and transport pollution, already postponed from 2027 to 2028, saying another delay “is also not the answer to our problems.”
Aitor Hernández-Morales and Zoya Sheftalovich contributed reporting.