Greens Slam Merz’s EU Carbon Trade Overhaul Plans Warn of Market Weakening

Greens Slam Merz's EU Carbon Trade Overhaul Plans Warn of Market Weakening

Franziska Brantner, co‑chair of the Greens, rejected Chancellor Friedrich Merz’s proposal to overhaul the EU’s existing CO₂‑emission trading system and, if necessary, postpone the next steps due to the strained economic situation. Speaking on RTL’s “Frühstart” and ntv on Thursday, she said that Germany must preserve and renew its prosperity “without destroying the planet” and that the country should develop and profit from climate technologies, rather than leaving that to China.

Brantner emphasized the importance of maintaining planability and rewarding climate protection. She noted that the market mechanism behind the CO₂‑emission trading system is one that Mr Merz has long supported. Now the focus should be on boosting European competitiveness-making the system faster, simpler, and protecting German industry from unfair competition.

According to her, the federal government could cut the electricity tax, stabilize wage‑related costs, and invest in innovation. She argued that chasing a “future in the past” and refusing a sustainable path of prosperity is absurd, as “the Chinese are making huge profits” while Germany should earn substantial income in return.

The EU’s two CO₂‑emission trading schemes are regarded as the most important climate‑protection instruments. The system limits the amount of CO₂ that can be emitted by allocating a finite number of certificates. Currently, the number of certificates in the EU Emission Trading System for energy and industry (EU‑ETS 1) is reduced by 4.4 % each year, meaning that the system will run out of certificates by 2039. Companies receive some certificates free of charge, but from this year on the free allocation will be sharply reduced.

In Germany, revenue from CO₂‑emission trading is directed to the Climate and Transformation Fund. The fund finances projects such as the expansion of renewable energy, promotion of e‑mobility, energy‑efficient building renovations, hydrogen initiatives, and the shift toward climate‑friendly industrial processes.