Romania, nine other states call on EU to revise new CO2 pricing system

Romania, Italy, Poland, and seven other states have called on the European Union to revise its new carbon price on fuel on the occasion of a wider revision of the EU's main climate policy instrument, the Emissions Trading System, or ETS, according to a joint statement seen by Reuters. 

In a statement submitted to the Commission on Tuesday, July 14, the ten countries said the revision should also be used to rethink the new CO2 pricing system, known as "ETS 2," which the EU plans to impose on fuels used for heating and transport starting in 2028.

Italy, Poland, Bulgaria, Cyprus, the Czech Republic, Estonia, Greece, Hungary, Romania, and Slovakia signed the statement.

The ten states’ opposition to the tax risks disrupting plans to update the ETS and could put them at odds with supporters of the new tax, such as Germany and Sweden. The differences between the two camps will come to a head on Friday, July 17, when the European Commission is set to propose a revision of the trading system, which requires power plants, factories, airlines, and shipping companies to pay for their own CO2 emissions.

Romania and other states said that consumers should not face a new indirect tax. "European citizens should not face new climate taxes under the current economic and geopolitical circumstances. ETS 2 should therefore be addressed directly within the revision and carefully reconsidered," the statement signed by the 10 countries said.

The ten countries also requested that the EU grant manufacturers more free CO2 allowances without general conditions, such as requiring them to invest in decarbonization. 

Concerns over the new carbon price on fuel, effectively a fuel tax, have already delayed the EU’s plans for implementation by one year. Supporters of the measure argue that it is essential for the transition to cleaner vehicles and heating systems, and that the revenue generated from the CO2 tax will be reinvested to support the public in the transition to clean technologies, thereby reducing the burden on consumers.

The Commission has said it does not want to make further changes to the measure before its launch. However, when the Council and the European Parliament negotiate and approve the changes to the carbon market, they may also add their own amendments, including regarding the ETS 2 tax. 

“The 10 countries that signed the statement hold enough votes within the EU system to block amendments they oppose,” Kate Abnett wrote for Reuters.

radu@romania-insider.com

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