Why is Cefic urgently calling for reform of the EU Emissions Trading System (ETS)?

Cefic is urgently calling for ETS reform because the current system’s rapid tightening of carbon reduction targets and soaring carbon prices—projected to reach €70–80/ton by 2026 and potentially exceed €150/ton by decade’s end—are driving massive, irreversible capacity losses: 37 million tonnes of chemical production capacity shut down across the EU between 2022 and end-2025 (9% of total), with shutdown rates six times faster than pre-2022 levels; major companies like Dow, BASF, and INEOS have idled nearly half their steam cracker units in Germany, France, and the UK; this exodus risks 'carbon leakage'—shifting production to regions with laxer climate policies—undermining global emissions reductions while threatening tens of thousands of jobs and critical supply chains for pharmaceuticals,新能源, automotive, and food security.

What are Cefic’s five key reform proposals for the EU ETS?

Cefic’s five reform proposals are: (1) aligning the ETS emissions allowance reduction curve with the actual pace of scalable low-carbon technology deployment; (2) establishing a long-term, robust carbon leakage protection mechanism specifically for energy-intensive chemical industries; (3) setting benchmark standards based on commercially mature, industrially deployed processes—not lab-scale or pilot technologies; (4) continuing full free allocation of carbon allowances to high-energy users until the Carbon Border Adjustment Mechanism (CBAM) fully eliminates global carbon cost disparities; and (5) introducing a carbon price stabilization mechanism to curb extreme volatility caused by financial speculation.

Cefic Urges Reform of EU Emissions Trading System Amid Capacity Loss

Jul 6, 2026

Cefic urges EU reform of the Emissions Trading System, warning high carbon costs caused 37 million tons of capacity loss and risk further industrial hollowing out. Leaders demand balanced policies to protect the chemical sector while meeting climate goals.

ccin

2025-10-23

Cefic proposes policy actions to lower EU gas cost, restore chemical industry’s competitiveness

2025-11-06

EU ETS post-2030 must support decarbonization of energy-intensive industries – Cefic

2025-11-12

Cefic calls for measures to enable EU chemical industry’s transition to circularity

2026-01-19

Cefic Joins European Business Associations in Welcoming EU-Mercosur Agreement

2026-01-23

Cefic’s Fine Chemicals Group Welcomes European Parliament Support for Critical Medicines Act