BRUSSELS — Donald Trump blew up global efforts to cut emissions from shipping, and now the EU is terrified the U.S. president will do the same to any plans to tax carbon emissions from long-haul flights. The European Commission is studying whether to expand its existing carbon pricing scheme that forces airlines to pay for emissions from short- and medium-haul flights within Europe into a more ambitious effort covering all flights departing the bloc. If that happens, all international airlines flying out of Europe — including U.S. ones — would face higher costs, something that’s likely to stick in the craw of the Trump administration. “God only knows what the Trump administration will do” if Brussels expands its own Emissions Trading System to include transatlantic flights, a senior EU official told POLITICO. A big issue is how to ensure that the new system doesn’t end up charging only European airlines, which often complain about the higher regulatory burden they face compared with their non-EU rivals. The EU official said Commission experts are now “scratching their heads how you can, on the one hand, talk about extending the ETS worldwide … [but] also make sure that you have a bit of a level playing field,” meaning a system that doesn’t only penalize European carriers. Any new costs will hit airlines by 2027, following a Commission assessment that will be completed by July 1. Brussels has reason to be worried.  “Trump has made it very clear that he does not want any policies that harm business … So he does not want any environmental regulation,” said Marina Efthymiou, aviation management professor at Dublin City University. “We do have an administration with a bullying behavior threatening countries and even entities like the European Commission.” The new U.S. National Security Strategy, released last week, closely hews to Trump’s thinking and is scathing on climate efforts. “We reject the disastrous ‘climate change’ and ‘Net Zero’ ideologies that have so greatly harmed Europe, threaten the United States, and subsidize our adversaries,” it says. In October, the U.S. led efforts to prevent the International Maritime Organization from setting up a global tax to encourage commercial fleets to go green. The no-holds-barred push was personally led by Trump and even threatened negotiators with personal consequences if they went along with the measure. In October, the U.S. led efforts to prevent the International Maritime Organization from setting up a global tax aimed at encouraging commercial fleets to go green. | Nicolas Tucat/AFP via Getty Images This “will be a parameter to consider seriously from the European Commission” when it thinks about aviation, Efthymiou said. The airline industry hopes the prospect of a furious Trump will scare off the Commission. “The EU is not going to extend ETS to transatlantic flights because that will lead to a war,” said Willie Walsh, director general of the International Air Transport Association, the global airline lobby, at a November conference in Brussels. “And that is not a war that the EU will win.” EUROPEAN ETS VS. GLOBAL CORSIA In 2012, the EU began taxing aviation emissions through its cap-and-trade ETS, which covers all outgoing flights from the European Economic Area — meaning EU countries plus Iceland, Liechtenstein and Norway. Switzerland and the U.K. later introduced similar schemes. In parallel, the U.N.’s International Civil Aviation Organization was working on its own carbon reduction plan, the Carbon Offsetting and Reduction Scheme for International Aviation. Given that fact, Brussels delayed imposing the ETS on flights to non-European destinations. The EU will now be examining the ICAO’s CORSIA to see if it meets the mark. “CORSIA lets airlines pay pennies for pollution — about €2.50 per passenger on a Paris-New York flight,” said Marte van der Graaf, aviation policy officer at green NGO Transport & Environment. Applying the ETS on the same route would cost “€92.40 per passenger based on 2024 traffic.” There are two reasons for such a big difference: the fourfold higher price for ETS credits compared with CORSIA credits, and the fact that “under CORSIA, airlines don’t pay for total emissions, but only for the increase above a fixed 2019 baseline,” Van der Graaf explained. “Thus, for a Paris-New York flight that emits an average of 131 tons of CO2, only 14 percent of emissions are offset under CORSIA. This means that, instead of covering the full 131 tons, the airline only has to purchase credits for approximately 18 tons.” Efthymiou, the professor, warned the price difference is projected to increase due to the progressive withdrawal of free ETS allowances granted to aviation. The U.N. scheme will become mandatory for all U.N. member countries in 2027 but will not cover domestic flights, including those in large countries such as the U.S., Russia and China. KEY DECISIONS By July 1, the Commission must release a report assessing the geographical coverage and environmental integrity of CORSIA. Based on this evaluation, the EU executive will propose either extending the ETS to all departing flights from the EU starting in 2027 or maintaining it for intra-EU flights only. Opposition to the ETS in the U.S. dates back to the Barack Obama administration. | Pete Souza/White House via Getty Images According to T&E, CORSIA doesn’t meet the EU’s climate goals. “Extending the scope of the EU ETS to all departing flights from 2027 could raise an extra €147 billion by 2040,” said Van der Graaf, noting that this money could support the production of greener aviation fuels to replace fossil kerosene. But according to Efthymiou, the Commission might decide to continue the current exemption “considering the very fragile political environment we currently have with a lunatic being in power,” she said, referring to Trump. “CORSIA has received a lot of criticism for sure … but the importance of CORSIA is that for the first time ever we have an agreement,” she added. “Even though that agreement might not be very ambitious, ICAO is the only entity with power to put an international regulation [into effect].” Regardless of what is decided in Brussels, Washington is prepared to fight. Opposition to the ETS in the U.S. dates back to the Barack Obama administration, when then-Secretary of State Hillary Clinton sent a letter to the Commission opposing its application to American airlines. During the same term, the U.S. passed the EU ETS Prohibition Act, which gives Washington the power to prohibit American carriers from paying for European carbon pricing. John Thune, the Republican politician who proposed the bill, is now the majority leader of the U.S. Senate.

LONDON — The government is preparing a bill that will give overarching powers to allow the U.K. to align with the EU over a wide suite of areas to give legal shape to their “reset” deal with the bloc. One U.K. official said a bill is due to be introduced to parliament this spring or summer, establishing a legal framework for U.K.-EU alignment. These potential areas include food standards, animal welfare, pesticide use, the EU’s electricity market and carbon emissions trading, according to the official, who was granted anonymity to speak freely about the plans. The bill would create a new framework for the U.K. government and devolved administrations to adopt new EU laws when they are passed in Brussels. It raises the prospect that new EU laws in agreed areas will effectively transfer to the U.K. statute book automatically, with Britain retaining the power to veto them in specific cases. U.K. officials stress that the exact form the powers will take has not yet been decided. The U.K. is currently negotiating a Brexit “reset” agreement with the bloc, including an agrifood deal, plans to link its emissions trading system with the EU’s and reintegrating electricity markets. Britain is still seeking carve-outs as part of these deals, the official said, making it too early to say exactly where alignment will happen and what it will look like. News of the scope of the bill comes after EU Relations Minister Nick Thomas-Symonds said in August last year that parliament would “rightly have a say” on alignment with new EU rules in a speech delivered to The Spectator. He has insisted that the U.K. will still “have decision-shaping rights when new EU policies are made.” The U.K. government has been approached for comment.

Europe’s chemical industry has reached a breaking point. The warning lights are no longer blinking — they are blazing. Unless Europe changes course immediately, we risk watching an entire industrial backbone, with the countless jobs it supports, slowly hollow out before our eyes. Consider the energy situation: this year European gas prices have stood at 2.9 times higher than in the United States. What began as a temporary shock is now a structural disadvantage. High energy costs are becoming Europe’s new normal, with no sign of relief. This is not sustainable for an energy-intensive sector that competes globally every day. Without effective infrastructure and targeted energy-cost relief — including direct support, tax credits and compensation for indirect costs from the EU Emissions Trading System (ETS) — we are effectively asking European companies and their workers to compete with their hands tied behind their backs. > Unless Europe changes course immediately, we risk watching an entire > industrial backbone, with the countless jobs it supports, slowly hollow out > before our eyes. The impact is already visible. This year, EU27 chemical production fell by a further 2.5 percent, and the sector is now operating 9.5 percent below pre-crisis capacity. These are not just numbers, they are factories scaling down, investments postponed and skilled workers leaving sites. This is what industrial decline looks like in real time. We are losing track of the number of closures and job losses across Europe, and this is accelerating at an alarming pace. And the world is not standing still. In the first eight months of 2025, EU27 chemicals exports dropped by €3.5 billion, while imports rose by €3.2 billion. The volume trends mirror this: exports are down, imports are up. Our trade surplus shrank to €25 billion, losing €6.6 billion in just one year. Meanwhile, global distortions are intensifying. Imports, especially from China, continue to increase, and new tariff policies from the United States are likely to divert even more products toward Europe, while making EU exports less competitive. Yet again, in 2025, most EU trade defense cases involved chemical products. In this challenging environment, EU trade policy needs to step up: we need fast, decisive action against unfair practices to protect European production against international trade distortions. And we need more free trade agreements to access growth market and secure input materials. “Open but not naïve” must become more than a slogan. It must shape policy. > Our producers comply with the strictest safety and environmental standards in > the world. Yet resource-constrained authorities cannot ensure that imported > products meet those same standards. Europe is also struggling to enforce its own rules at the borders and online. Our producers comply with the strictest safety and environmental standards in the world. Yet resource-constrained authorities cannot ensure that imported products meet those same standards. This weak enforcement undermines competitiveness and safety, while allowing products that would fail EU scrutiny to enter the single market unchecked. If Europe wants global leadership on climate, biodiversity and international chemicals management, credibility starts at home. Regulatory uncertainty adds to the pressure. The Chemical Industry Action Plan recognizes what industry has long stressed: clarity, coherence and predictability are essential for investment. Clear, harmonized rules are not a luxury — they are prerequisites for maintaining any industrial presence in Europe. This is where REACH must be seen for what it is: the world’s most comprehensive piece of legislation governing chemicals. Yet the real issues lie in implementation. We therefore call on policymakers to focus on smarter, more efficient implementation without reopening the legal text. Industry is facing too many headwinds already. Simplification can be achieved without weakening standards, but this requires a clear political choice. We call on European policymakers to restore the investment and profitability of our industry for Europe. Only then will the transition to climate neutrality, circularity, and safe and sustainable chemicals be possible, while keeping our industrial base in Europe. > Our industry is an enabler of the transition to a climate-neutral and circular > future, but we need support for technologies that will define that future. In this context, the ETS must urgently evolve. With enabling conditions still missing, like a market for low-carbon products, energy and carbon infrastructures, access to cost-competitive low-carbon energy sources, ETS costs risk incentivizing closures rather than investment in decarbonization. This may reduce emissions inside the EU, but it does not decarbonize European consumption because production shifts abroad. This is what is known as carbon leakage, and this is not how EU climate policy intends to reach climate neutrality. The system needs urgent repair to avoid serious consequences for Europe’s industrial fabric and strategic autonomy, with no climate benefit. These shortcomings must be addressed well before 2030, including a way to neutralize ETS costs while industry works toward decarbonization. Our industry is an enabler of the transition to a climate-neutral and circular future, but we need support for technologies that will define that future. Europe must ensure that chemical recycling, carbon capture and utilization, and bio-based feedstocks are not only invented here, but also fully scaled here. Complex permitting, fragmented rules and insufficient funding are slowing us down while other regions race ahead. Decarbonization cannot be built on imported technology — it must be built on a strong EU industrial presence. Critically, we must stimulate markets for sustainable products that come with an unavoidable ‘green premium’. If Europe wants low-carbon and circular materials, then fiscal, financial and regulatory policy recipes must support their uptake — with minimum recycled or bio-based content, new value chain mobilizing schemes and the right dose of ‘European preference’. If we create these markets but fail to ensure that European producers capture a fair share, we will simply create new opportunities for imports rather than European jobs. > If Europe wants a strong, innovative resilient chemical industry in 2030 and > beyond, the decisions must be made today. The window is closing fast. The Critical Chemicals Alliance offers a path forward. Its primary goal will be to tackle key issues facing the chemical sector, such as risks of closures and trade challenges, and to support modernization and investments in critical productions. It will ultimately enable the chemical industry to remain resilient in the face of geopolitical threats, reinforcing Europe’s strategic autonomy. But let us be honest: time is no longer on our side. Europe’s chemical industry is the foundation of countless supply chains — from clean energy to semiconductors, from health to mobility. If we allow this foundation to erode, every other strategic ambition becomes more fragile. If you weren’t already alarmed — you should be. This is a wake-up call. Not for tomorrow, for now. Energy support, enforceable rules, smart regulation, strategic trade policies and demand-driven sustainability are not optional. They are the conditions for survival. If Europe wants a strong, innovative resilient chemical industry in 2030 and beyond, the decisions must be made today. The window is closing fast. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is CEFIC- The European Chemical Industry Council  * The ultimate controlling entity is CEFIC- The European Chemical Industry Council  More information here.

High energy prices, risks on CBAM enforcement and promotion of lead markets, as well as increasing carbon costs are hampering domestic and export competitiveness with non-EU producers. The cement industry is fundamental to Europe’s construction value chain, which represents about 9 percent of the EU’s GDP. Its hard-to-abate production processes are also currently responsible for 4 percent of EU emissions, and it is investing heavily in measures aimed at achieving full climate neutrality by 2050, in line with the European Green Deal. Marcel Cobuz, CEO, TITAN Group  “We should take a longer view and ensure that the cement industry in EU stays competitive domestically and its export market shares are maintained.” However, the industry’s efforts to comply with EU environmental regulations, along with other factors, make it less competitive than more carbon-intensive producers from outside Europe. Industry body Cement Europe recently stated that, “without a competitive business model, the very viability of the cement industry and its prospects for industrial decarbonization are at risk.” Marcel Cobuz, member of the Board of the Global Cement and Concrete Association and CEO of TITAN Group, one of Europe’s leading producers, spoke with POLITICO Studio about the vital need for a clear policy partnership with Brussels to establish a predictable regulatory and financing framework to match the industry’s decarbonization ambitions and investment efforts to stay competitive in the long-term. POLITICO Studio: Why is the cement industry important to the EU economy?  Marcel Cobuz: Just look around and you will see how important it is. Cement helped to build the homes that we live in and the hospitals that care for us. It’s critical for our transport and energy infrastructure, for defense and increasingly for the physical assets supporting the digital economy. There are more than 200 cement plants across Europe, supporting nearby communities with high-quality jobs. The cement industry is also key to the wider construction industry, which employs 14.5 million people across the EU. At the same time, cement manufacturers from nine countries compete in the international export markets. PS: What differentiates Titan within the industry?  MC: We have very strong European roots, with a presence in 10 European countries. Sustainability is very much part of our DNA, so decarbonizing profitably is a key objective for us. We’ve reduced our CO2 footprint by nearly 25 percent since 1990, and we recently announced that we are targeting a similar reduction by 2030 compared to 2020. We are picking up pace in reducing emissions both by using conventional methods, like the use of alternative sources of low-carbon energy and raw materials, and advanced technologies. TITAN/photo© Nikos Daniilidis We have a large plant in Europe where we are exploring building one of the largest carbon capture projects on the continent, with support from the Innovation Fund, capturing close to two million tons of CO2 and producing close to three million tons of zero-carbon cement for the benefit of all European markets. On top of that, we have a corporate venture capital fund, which partners with startups from Europe to produce the materials of tomorrow with  very low or zero carbon. That will help not only TITAN but the whole industry to accelerate its way towards the use of new high-performance materials with a smaller carbon footprint. PS: What are the main challenges for the EU cement industry today?  MC: Several factors are making us less competitive than companies from outside the EU. Firstly, Europe is an expensive place when it comes to energy prices. Since 2021, prices have risen by close to 65 percent, and this has a huge impact on cement producers, 60 percent of whose costs are energy-related. And this level of costs is two to three times higher than those of our neighbors. We also face regulatory complexity compared to our outside competitors, and the cost of compliance is high. The EU Emissions Trading System (ETS) cost for the cement sector is estimated at €97 billion to €162 billion between 2023 and 2034. Then there is the need for low-carbon products to be promoted ― uptake is still at a very low level, which leads to an investment risk around new decarbonization technologies. > We should take a longer view and ensure that the cement industry in the EU > stays competitive domestically and its export market shares are maintained.” All in all, the playing field is far from level. Imports of cement into the EU have increased by 500 percent since 2016. Exports have halved ― a loss of value of one billion euros. The industry is reducing its cost to manufacture and to replace fossil fuels, using the waste of other industries, digitalizing its operations, and premiumizing its offers. But this is not always enough. Friendly policies and the predictability of a regulatory framework should accompany the effort. PS: In January 2026, the Carbon Border Adjustment Mechanism will be fully implemented, aimed at ensuring that importers pay the same carbon price as domestic producers. Will this not help to level the playing field? MC: This move is crucial, and it can help in dealing with the increasing carbon cost. However, I believe we already see a couple of challenges regarding the CBAM. One is around self-declaration: importers declare the carbon footprint of their materials, so how do we avoid errors or misrepresentations? In time there should be audits of the importers’ industrial installations and co-operation with the authorities at source to ensure the data flow is accurate and constant. It really needs to be watertight, and the authorities need to be fully mobilized to make sure the real cost of carbon is charged to the importers. Also, and very importantly, we need to ensure that CBAM does not apply to exports from the EU to third countries, as carbon costs are increasingly a major factor making us uncompetitive outside the EU, in markets where we were present for more than 20 years. > CBAM really needs to be watertight, and the authorities need to be fully > mobilized to make sure the real cost of carbon is charged to the importers.” PS: In what ways can the EU support the European cement industry and help it to be more competitive? MC: By simplifying legislation and making it more predictable so we can plan our investments for the long term. More specifically, I’m talking about the revamping of the ETS, which in its current form implies a phase-down of CO2 rights over the next decade. First, we should take a longer view and ensure that the cement industry stays competitive and its export market shares are maintained, so a policy of more for longer should accompany the new ETS. > In export markets, the policy needs to ensure a level playing field for > European suppliers competing in international destination markets, through a > system of free allowances or CBAM certificates, which will enable exports to > continue.” We should look at it as a way of funding decarbonization. We could front-load part of ETS revenues in a fund that would support the development of technologies such as low-carbon materials development and CCS. The roll-out of Infrastructure for carbon capture projects such as transport or storage should also be accelerated, and the uptake of low-carbon products should be incentivized. More specifically on export markets, the policy needs to ensure a level playing field for European suppliers competing in international destination markets, through a system of free allowances or CBAM certificates, which will enable exports to continue. PS: Are you optimistic about the future of your industry in Europe?  MC: I think with the current system of phasing out CO2 rights, and if the CBAM is not watertight, and if energy prices remain several times higher than in neighboring countries, and if investment costs, particularly for innovating new technologies, are not going to be financed through ETS revenues, then there is an existential risk for at least part of the industry. Having said that, I’m optimistic that, working together with the European Commission we can identify the right policy making solutions to ensure our viability as a strategic industry for Europe. And if we are successful, it will benefit everyone in Europe, not least by guaranteeing more high-quality jobs and affordable and more energy-efficient materials for housing ― and a more sustainable and durable infrastructure in the decades ahead. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Titan Group * The advertisement is linked to policy advocacy around industrial competitiveness, carbon pricing, and decarbonization in the EU cement and construction sectors, including the EU’s CBAM legislation, the Green Deal, and the proposed revision of the ETS. More information here.

Disclaimer: POLITICAL ADVERTISEMENT * The sponsor is Polish Electricity Association (PKEE) * The advertisement is linked to policy advocacy on energy transition, electricity market design, and industrial competitiveness in the EU. More information here The European Union is entering a decisive decade for its energy transformation. With the international race for clean technologies accelerating, geopolitical tensions reshaping markets and competition from other major global economies intensifying, how the EU approaches the transition will determine its economic future. If managed strategically, the EU can drive competitiveness, growth and resilience. If mismanaged, Europe risks losing its industrial base, jobs and global influence.  > If managed strategically, the EU can drive competitiveness, growth and > resilience. If mismanaged, Europe risks losing its industrial base, jobs and > global influence. This message resonated strongly during PKEE Energy Day 2025, held in Brussels on October 14, which brought together more than 350 European policymakers, industry leaders and experts under the theme “Secure, competitive and clean: is Europe delivering on its energy promise?”. One conclusion was clear: the energy transition must serve the economy, not the other way around.  Laurent Louis Photography for PKEE The power sector: the backbone of Europe’s industrial future  The future of European competitiveness will be shaped by its power sector. Without a successful transformation of electricity generation and distribution, other sectors — from steel and chemicals to mobility and digital — will fail to decarbonize. This point was emphasized by Konrad Wojnarowski, Poland’s deputy minister of energy, who described electricity as “vital to development and competitiveness.”  “Transforming Poland’s energy sector is a major technological and financial challenge — but we are on the right track,” he said. “Success depends on maintaining the right pace of change and providing strong support for innovation.” Wojnarowski also underlined that only close cooperation between governments, industry and academia can create the conditions for a secure, competitive and sustainable energy future.  Flexibility: the strategic enabler  The shift to a renewables-based system requires more than capacity additions — it demands a fundamental redesign of how electricity is produced, managed and consumed. Dariusz Marzec, president of the Polish Electricity Association (PKEE) and CEO of PGE Polska Grupa Energetyczna, called flexibility “the Holy Grail of the power sector.”  Speaking at the event, Marzec also stated “It’s not about generating electricity continuously, regardless of demand. It’s about generating it when it’s needed and making the price attractive. Our mission, as part of the European economy, is to strengthen competitiveness and ensure energy security for all consumers – not just to pursue climate goals for their own sake. Without a responsible approach to the transition, many industries could relocate outside Europe.”  The message is clear: the clean energy shift must balance environmental ambition with economic reality. Europe cannot afford to treat decarbonization as an isolated goal — it must integrate it into a broader industrial strategy.  > The message is clear: the clean energy shift must balance environmental > ambition with economic reality. The next decade will define success  While Europe’s climate neutrality target for 2050 remains a cornerstone of EU policy, the next five to ten years will determine whether the continent remains globally competitive. Grzegorz Lot, CEO of TAURON Polska Energia and vice-president of PKEE, warned that technology is advancing too quickly for policymakers to rely solely on long-term milestones.  “Technology is evolving too fast to think of the transition only in terms of 2050. Our strategy is to act now — over the next year, five years, or decade,” Lot said. He pointed to the expected sharp decline in coal consumption over the next three years and called for immediate investment in proven technologies, particularly onshore wind.  Lot also raised concerns about structural barriers. “Today, around 30 percent of the price of electricity is made up of taxes. If we want affordable energy and a competitive economy, this must change,” he argued.  Consumers and regulation: the overlooked pillars  A successful energy transition cannot rely solely on investment and infrastructure. It also depends on regulatory stability and consumer participation. “Maintaining competitiveness requires not only investment in green technologies but also a stable regulatory environment and active consumer engagement,” Lot said.  He highlighted the potential of dynamic tariffs, which incentivize demand-side flexibility. “Customers who adjust their consumption to market conditions can pay below the regulated price level. If we want cheap energy, we must learn to follow nature — consuming and storing electricity when the sun shines or the wind blows.”  Strategic investments for resilience  The energy transition is more than a climate necessity. It is a strategic requirement for Europe’s security and economic autonomy. Marek Lelątko, vice-president of Enea, stressed that customer- and market-oriented investment is essential. “We are investing in renewables, modern gas-fired units and energy storage because they allow us to ensure supply stability, affordable prices and greater energy security,” he said.  Grzegorz Kinelski, CEO of Enea and vice-president of PKEE, added: “We must stay on the fast track we are already on. Investments in renewables, storage and CCGT [combined cycle gas turbine] units will not only enhance energy security but also support economic growth and help keep energy prices affordable for Polish consumers.”  The power sector must now be recognized as a strategic enabler of Europe’s industrial future — on par with semiconductors, critical raw materials and defense. As Dariusz Marzec puts it: “The energy transition is not a choice — it is a necessity. But its success will determine more than whether we meet climate targets. It will decide whether Europe remains competitive, prosperous and economically independent in a rapidly changing world.”  > The power sector must now be recognized as a strategic enabler of Europe’s > industrial future — on par with semiconductors, critical raw materials and > defense. Measurable progress, but more is needed  Progress is visible. The power sector accounts for around 30 percent of EU emissions but has already delivered 75 percent of all Emissions Trading System reductions. By 2025, 72 percent of Europe’s electricity will come from low-carbon sources, while fossil fuels will fall to a historic low of 28 percent. And in Poland, in June, renewable energy generation overtook coal for the first time in history.  Still, ambition alone is not enough. In his closing remarks, Marcin Laskowski, vice-president of PKEE and executive vice-president for regulatory affairs at PGE Polska Grupa Energetyczna, stressed the link between the power sector and Europe’s broader economic transformation. “The EU’s economic transformation will only succeed if the energy transition succeeds — safely, sustainably and with attractive investment conditions,” he said. “It is the power sector that must deliver solutions to decarbonize industries such as steel, chemicals and food production.”  A collective European project  The event in Brussels — with the participation of many high-level speakers, including Mechthild Wörsdörfer, deputy director general of DG ENER; Tsvetelina Penkova, member of the European Parliament and vice-chair of the Committee on Industry, Research and Energy; Thomas Pellerin-Carlin, member of the European Parliament; Catherine MacGregor; CEO of ENGIE and vice-president of Eurelectric; and Claude Turmes, former minister of energy of Luxembourg — highlighted a common understanding: the energy transition is not an isolated environmental policy, it is a strategic industrial project. Its success will depend on coordinated action across EU institutions, national governments and industry, as well as predictable regulation and financing.  Europe’s ability to remain competitive, resilient and prosperous will hinge on whether its power sector is treated not as a cost to be managed, but as a foundation to be strengthened. The next decade is a window of opportunity — and the choices made today will shape Europe’s economic landscape for decades to come. 

Andrej Babiš, the right-wing populist who on Monday formed Czechia’s next government, wants to derail EU plans on curbing emissions, according to the government’s coalition program, seen by POLITICO’s Brussels Playbook. Babiš and his ANO movement formed a coalition with the right-wing Motorists for Themselves party and the nationalist Freedom and Direct Democracy. Babiš is expected to make his return to the European Council table at the next gathering of EU leaders in Brussels on Dec. 18-19. Critics fear that Czechia could become a new bête noire for the EU alongside Viktor Orbán’s Hungary and Robert Fico’s Slovakia. “I believe that if we look at his statements and his allies in Europe — like Viktor Orbán and what he has done with Hungary — he [Babiš] will start pushing the Czech Republic toward the margins,” Czech Foreign Minister Jan Lipavský told POLITICO. While Babiš still needs to be formally nominated as prime minister by the Czech president, he already has grand plans for his EU comeback: unraveling the bloc’s green policies. “The Green Deal is unsustainable in its current form, which is why we will promote its fundamental revision,” the draft coalition program reads.   The new government plans to push back against the implementation of a new market that would put a price on heating and fuel emissions (dubbed ETS2). The new emissions trading system is a cornerstone of the EU’s efforts to slash planet-warming emissions from the building and transport sectors and achieve climate neutrality by 2050. The Czech plan also states the government “will initiate a European-level reassessment” of the original emissions trading scheme, ETS1, which covers pollution from heavy industries and the energy sector. EU governments have already voted in favor of ETS2 and it is due to come into effect in 2027. However, the draft Czech government program includes a threat not to enact the rules: “In the case of ETS2 emission allowances for households and transport, we are prepared not to implement this system into Czech legislation and to prevent highly negative social impacts on society.” The draft also reveals that a future Babiš government views an EU ban on the sale and production of cars with combustion engines from 2035 as “unacceptable.” “The European Union has its limits — it does not have the right to impose decisions on member states that interfere with their internal sovereignty,” the draft reads. The ban was approved in 2023 by all member countries (despite last-minute resistance from Germany) but has proven controversial. Babiš is not alone in wanting to challenge EU Green Deal rules. The previous Czech government also requested a delay in ETS2 implementation, and Estonia called for it to be scrapped. Babiš may find an ally in Polish Prime Minister Donald Tusk, who trumpeted his success in inserting a “revision clause” into the EU plans to extend a carbon-trading system at a leaders’ gathering last month.  While the revision clause demanded by EU leaders does not explicitly call for a weaker ETS2, Tusk believes it will open the door to a delay of the measure. Babiš intends to personally oversee EU policy — abolishing the role of minister for European affairs and placing responsibility for EU matters in a department “subordinate” to the prime minister. The parties in the coalition will be expected to sign off on the government program. Then comes a period of wrangling as Babiš is expected to try to install Filip Turek, the controversial honorary president of the Motorists’ party, as foreign minister — a move President Petr Pavel may oppose, according to an EU diplomat.  Czech news outlet Deník N reported last month that Turek — a former member of the European Parliament and racing driver — had made racist, sexist and homophobic comments on Facebook before entering politics. Turek denied being behind the posts in a video posted on Facebook.

BRUSSELS — The European Union’s national leaders spent a summit venting their frustration about the bloc’s green transition — and ultimately agreed on language that didn’t demand specific changes to climate legislation. Thursday’s debate centered on how to align the EU’s climate goals with economic priorities, and was meant to resolve a deadlock over the bloc’s new emissions-cutting target for 2040. Many leaders raised national pet issues during the discussion, seven diplomats briefed on the talks said. But they refrained from insisting their specific concerns be addressed in the final summit text — which would have made it impossible to reach a consensus agreement. The eventual conclusions were agreed unchanged from the draft text prepared by diplomats this week — though few countries were entirely satisfied with the outcome. “Classic balance, everyone equally unhappy,” one diplomat said. Members of several governments were left wondering what difference the agreement would make for the 2040 climate target. Ministers had postponed their vote on the new goal in September, after some of the EU’s largest countries refused to approve the law without their leaders having a say. But the text agreed Thursday is deliberately vague, and stops short of endorsing the 2040 goal. That target, as proposed by the European Commission, would reduce the EU’s planet-warming emissions by up to 90 percent below 1990 levels. Ministers are due to reconvene and cast a vote on Nov. 4 — “groundhog day,” a second diplomat said. A third EU diplomat said they did “not see how the cards are any different” than in September, when ministers first tried to vote on the target. Leaders may just have “delayed the crisis” to Nov. 4, the diplomat added. Yet a fourth and fifth diplomat said they felt the discussion had sufficiently reassured key countries, particularly France and Germany, to enable them to support the target in the upcoming vote. The leaders’ agreement sets out “the enabling conditions” to achieve the climate target, the fourth diplomat said, with details to be worked out ahead of the Nov. 4 meeting. But the devil may be in those very details. After leaders approved the text, some diplomats interpreted a passage on the bloc’s new carbon tax on transport and heating fuels as opening the door to delaying its implementation. Other diplomats said that was not how they read the text. Still, many diplomats expressed relief that the debate had gone smoothly amid concerns that some leaders wanted to use the discussion to demand the EU weaken certain climate laws. Earlier in the week, European Commission President Ursula von der Leyen had issued a letter offering concessions to leaders, including revisions of some green laws and measures to limit the new carbon price. This letter, a seventh diplomat said, “was a game changer” and a decisive factor allowing leaders to reach Thursday’s agreement. Clea Caulcutt contributed reporting.

BRUSSELS — European Commission President Ursula von der Leyen has pledged to adjust key green laws to secure support for a new climate target.  In a letter to national leaders circulated on Monday, von der Leyen outlined plans to change the EU’s carbon pricing and existing climate targets for forests, among others.  The Commission president’s unusual intervention comes days before leaders are set to debate the EU’s new overarching emissions-reduction target for 2040 at their European Council summit. Governments have been unable to agree on the new target, with several EU countries expressing concern about the economic impact of the bloc’s new and existing climate measures. Leaders will discuss the link between competitiveness and climate on Thursday in Brussels.  In her letter, von der Leyen defends the upcoming target, insists that Europe’s future competitiveness requires a decarbonized economy — and hints that this means leaving some sectors behind.  “If a robust, resilient, sustainable and innovative economy is our goal, then dogmatically clinging to our existing business models, whatever their past successes, is not the solution,” she writes. “For the EU’s economy to take its rightful place in the global economy, we must be among those who are driving the response to the challenges of our time.”  Those challenges include “the scientific reality that we are increasingly putting our prosperity and our social models at risk, while our communities risk becoming uninhabitable,” she adds, while warning that the EU cannot afford complacency given China’s accelerating dominance in clean technologies and raw materials.  Yet von der Leyen also offers several key concessions to leaders, acknowledging that “no one should be able to submit our economic and social fabric to so much tension that it breaks down.”  GREEN DEAL TWEAKS Her Commission has proposed slashing the bloc’s planet-warming emissions by up to 90 percent below 1990 levels by 2040, albeit allowing countries to outsource up to 3 percentage points of this goal by purchasing carbon credits from other nations rather than achieving these reductions with domestic measures.  In her letter, von der Leyen opens the door to an increase in credit use, writing: “Part of the target — 3% in the Commission’s proposal, which ministers will further discuss — can be reached with high-quality international credits. Our domestic target … can be lower than 90%, as long as this is compensated by similar … reductions outside of the EU.”  She also responded to a key demand from governments to adjust the bloc’s new carbon price on transport and heating, plans that were controversial from the beginning as they are expected to lead to higher fuel bills for most consumers.  On Tuesday, she writes, the EU’s climate chief Wopke Hoekstra will announce specific tweaks to the measure, addressing “concerns of too high or volatile prices.” The Commission is looking at a “more robust price stabilisation system” as well as options to provide additional support for households to cope with the increased bills.  On Tuesday, she writes, the EU’s climate chief Wopke Hoekstra will announce specific tweaks to the measure, addressing “concerns of too high or volatile prices.” | Christophe Petit-Tesson/EPA Von der Leyen also said she shared some governments’ concerns about the carbon price the EU currently imposes on heavy-polluting industries such as steel, and promised a “realistic and feasible” future trajectory, without providing details.  She then pointed to upcoming changes in the EU’s targets for how much carbon dioxide is absorbed by forests and soils, known as LULUCF. Several governments have described the current goals as unrealistic, with some pointing to increased wildfires and others to the needs of their forestry industry.  “Already we can see the challenges that several of you are facing …. We are working on pragmatic solutions to alleviate these challenges, within the existing LULUCF Regulation,” von der Leyen writes.  Carbon markets and the LULUCF rules, together with national emissions targets, are the core sub-targets of the bloc’s climate framework.  The letter also reiterates already announced tweaks and plans, such as an accelerated review of the bloc’s combustion engine phaseout, and contains a lengthy annex outlining all the upcoming announcements.

PGE Group, Poland’s largest electricity and heat producer, has unveiled its ambitious new strategy for 2035. The strategy outlines an estimated €55 billion in investments aimed at transforming Poland’s energy landscape. It prioritizes energy grids, new flexible gas power plants, renewable energy sources and advanced energy storage systems, all while integrating modern heating solutions. Crucially, the strategy reinforces PGE’s commitment to achieving climate neutrality by 2050, with an interim target of reducing CO2 emissions by 75 percent by 2035, including from existing coal-based units. > Crucially, the strategy reinforces PGE’s commitment to achieving climate > neutrality by 2050, with an interim target of reducing CO2 emissions by 75 > percent by 2035. In an exclusive interview, Dariusz Marzec, the CEO of PGE, discusses the courage and responsibility required to follow through with a transformative action plan in a turbulent environment. PGE’s new strategy that lasts for 2035 is entitled: ‘Energy of secure future. Flexibility.’ Why is flexibility so important? Flexibility is essential.Nowadays, power systems are highly dependent on intermittent renewables. At midday — when the renewable(RES) generation is at the highest level — demand for dispatchable capacity drops substantially, but then in the evening after the sunset we can observe a rapid rise of demand. Flexibility is a tool to match variable demand with variable production. For this reason, we can use storage, power-to-heat solutions and flexible dispatchable gas generation. So, flexibility will allow us both to match demand and reduce price volatility. What kind of assets do you need for that? By 2035 we plan to develop 4 GW of offshore wind power plants and another 4 GW onshore. To enable more RES deployment we plan to increase our distribution grid capacity by up to 11 GW. To keep our power system stable we are also investing massively in energy storage. In 2035 we intend to operate energy storage facilities with a capacity of more than 18 GWh. We are building one of the largest lithium-ion energy storage facilities in Europe in Żarnowiec. All this will help us decrease CO2 emissions by 75 percent in just ten years due to rapidly decreasing generation of energy from coal. In some locations these old coal power plants are being replaced by flexible gas power plants. By 2035 we plan to operate 10 GW of them, however, they are not meant to work at full capacity all the time. > To keep our power system stable we are also investing massively in energy > storage. In 2035 we intend to operate energy storage facilities with a > capacity of more than 18 GWh. We are building one of the largest lithium-ion > energy storage facilities in Europe in Żarnowiec. How do you plan to finance these investments? How are banks looking at your projects taking into account that you spend €5 billion to €6 billion for the EU Emissions Trading System each year to cover emissions from coal assets? Yes, indeed, financing would be a challenge, but we have number of options and alternatives on the table. We can rely on currently available sources of financing for the energy transition, such as the Modernisation Fund, Recovery and Resilience Facility, and resources provided under the current Multiannual Financial Framework. Investments in the energy sector require long-term planning and a stable outlook, while most of the aforementioned funds are set to expire in the coming years. What we need is to ensure continuation of these funds to enable us to meet the 2035 targets. For example, only recently we signed 25-year loan agreements with the Polish Development Bank (BGK) for expanding distribution networks, which amounted to approximately €2.8 billion in March 2025 from the National Recovery and Resilience Fund. > Investments in the energy sector require long-term planning and a stable > outlook, while most of the aforementioned funds are set to expire in the > coming years. Our first offshore wind farm project, Baltica 2 — backed with a Contract for Difference — will cost around €7 billion. Of this amount, €3.5 billion, PGE’s share, has already been secured from financial institutions such as BGK, the Export and Investment Fund of Denmark, the European Investment Bank, the European Bank for Reconstruction and Development, and a large group of commercial banks. The gearing level achieved is approximately 75 percent, while the remaining equity contribution has been secured with a loan funded from the National Recovery and Resilience Fund. The key to successfully finance the project lies in the evaluation framework and its ability to generate stable, predictable and secured income — in other words, the project must be bankable. This guarantee is ensured through support mechanisms such as the Contract for Difference for offshore wind farms, the Capacity Market for gas and energy storage, and a dedicated mechanism to support flexibility in both power and heating systems. To better adapt to the local specifics we need a flexible state aid framework that more accurately reflects the actual costs of individual investments below the notification threshold. Moreover, capacity mechanisms should be recognized as an integral part of the energy market, and their implementation should be seen as essential in the volatile power system, serving as a preventive measure to avoid blackouts. Is this the main reason that you are planning to operate 10 GW of gas-fired capacity? Speaking about natural gas, we have to make a distinction between power and combined power and heat generation. Natural gas will be needed to decarbonize our district heating systems — here we have no alternatives to deliver heat at the required temperature, which is approximately 130 degrees Celsius. And yet in power system gas-fired capacity is also needed. According to the European Resource Adequacy Assessment, Europe will need an additional 50 GW in gas-fired capacity to ensure its energy security. Yet, here again, the district heating can contribute to the power system – in Poland almost 20 percent of electricity comes from combined heat and power. Still, you need to plan how to phase out coal, and that will have a negative impact on your balance sheet. How long do you want to keep coal assets? Today coal-fired power plants work for a much shorter periods of time than years ago, but they are still needed. In 2035 coal power plants will not have to produce anything at all, but they must be available as some kind of insurance policy — the cost of which we must cover for our security. Let me use an example, lignite mining in Belchatow is expected to end in 10-12 years, and in Turow a little later. Analyses are underway on how this 5-GW power gap will be secured after the coal deposits in Belchatow are exhausted. This location has gigantic grid assets and qualified engineering and technical staff to draw on. That’s why I am sure that this region will continue to be involved in energy. We will study the possibility of putting up a nuclear power plant there, while in the case of Turow we are considering putting up both a gas unit and a small modular reactor.

BRUSSELS — Jos Delbeke once banned Europe’s heavy industry from offsetting its pollution by paying for emission cuts abroad. Now he thinks it’s time to give the idea a second chance.  The retired Belgian official, who led the European Commission’s climate policy department until 2018, thinks Brussels is right to consider meeting part of the bloc’s next emissions-reduction target with international carbon credits. That puts him at odds with the EU’s own scientific advisers, who have warned against such a move.  EU Climate Commissioner Wopke Hoekstra is expected to unveil a 2040 climate target on July 2 that permits the use of such credits, which would allow the bloc to fund climate-friendly projects abroad and count the emissions cuts toward its domestic target. “I’m in favor of reopening the door for those credits,” Delbeke told POLITICO in an interview, “but we have to be very restrictive on the quality of those credits. And we have to be very alert and make our own decisions on the quantity that we are going to allow.”  During his decades-long career at the EU executive in Brussels, Delbeke played a key role in establishing the bloc’s carbon market, known as the Emissions Trading System (ETS). The system obliges heavy industry, airlines, power plant operators and shipping companies to pay for their pollution by purchasing CO2 permits that decline in supply and rise in price over time, incentivizing them to switch to cheaper, cleaner alternatives. In the 2010s, the ETS — the EU’s main tool for reducing emissions — allowed the use of international carbon credits regulated under a now-discredited global system known as the Clean Development Mechanism (CDM). This meant that instead of having to buy a pollution permit representing one ton of CO2 emitted in the EU, companies could also decide to purchase a credit representing one ton of CO2 reduced elsewhere.  The approach backfired, threatening the entire system. Many CDM credits were questionable and did not represent verifiable emissions cuts. On top of that, they were cheap and plentiful, flooding the ETS and suppressing the price, undermining the economic incentive for EU companies to cut their domestic emissions.  Delbeke first limited and then banned all foreign credits on the market. Offsetting has not been possible under the ETS since 2021. The CDM system “was well negotiated, but it was horribly implemented,” said Delbeke, who now lectures on climate policy and carbon markets at the European University Institute.  “Most of those credits came to Europe and were about to kill the ETS market,” he added. “It dampened the prices, and so along with a market stability reserve, we designed a policy to close the door to all credits coming from the CDM.” Yet times have changed, Delbeke insisted. A new global framework regulating credits under the Paris climate accord was finalized in November with the EU’s support. But the bloc has also “learned its lesson” not to accept any and all projects included in an international system, and should instead set its own standards, he said.  Delbeke also said there are alternatives to allowing credits within the carbon market, such as using them to offset emissions the ETS doesn’t cover: “Integrating them into the ETS is one option, but there are also other options.”  EU Climate Commissioner Wopke Hoekstra is expected to unveil a 2040 climate target on July 2. | Oliver Hoslet/EPA The idea of using credits to meet part of the EU’s 2040 target has drawn fierce criticism from green NGOs and the bloc’s own scientific advisory board on climate change, which warned that foreign credits risk undermining climate efforts and threaten the ETS price.  The European Parliament’s in-house think tank also warned on Thursday that “if international credits were readmitted, these concerns would remain today.”  But Delbeke thinks the EU needs to be more flexible about how it can reach its targets amid economic difficulties, global trade tensions, the war in Ukraine and Donald Trump’s return to the White House.  “If we are grown up in the discussion on carbon credits, being very restrictive on the quantity, very restrictive on the quality, it helps us to realize the targets that we are setting for ourselves in a world that is completely different from when we adopted the targets,” he said.  “The [EU’s] climate law was before the invasion of Ukraine, before we had Mr. Trump in office and before his tariff war. We now want more industry in Europe, we want more on defense, that’s going to increase emissions,” he added. “So the world is looking very different today and I think the targets that were agreed then may turn out to be more expensive than anticipated at the time.”