IndustriAll Europe warns that without adjustments, the current ETS framework risks accelerating deindustrialisation rather than supporting a fair transition. Rising carbon prices, reduced free allowances, and delays in low‑carbon infrastructure are creating severe pressure on energy‑intensive industries. Workers fear that without predictable conditions and adequate investment, decarbonisation will lead to site closures and job losses.

A predictable carbon price and real investment signals

The position paper calls for a carbon price that incentivises clean investment without threatening industrial jobs. IndustriAll Europe supports measures aiming to avoid sudden price spikes driven by speculation and proposes an Industrial Decarbonisation Observatory, involving trade unions, to monitor the rollout of key enablers such as clean hydrogen, carbon capture and storage, and grid infrastructure.

Using ETS revenues effectively

While the Innovation Fund and Modernisation Fund play a crucial role, they must be significantly reinforced. At national level, industriAll Europe calls for at least 50% of ETS revenues to be earmarked for industrial decarbonisation and its enablers, with strong social conditionalities attached to ensure that funded projects lead to long‑term investment and quality jobs.

The ETS–energy market nexus remains a major concern. The current marginal pricing system links electricity prices to fossil fuels and CO₂ costs, even when electricity is generated from low‑emission sources. This undermines electrification and penalises electro‑intensive industries. IndustriAll Europe reiterates its call for a deeper reform of the electricity market to ensure affordable, low‑carbon electricity for industry.

A framework that truly prevents carbon leakage

The Carbon Border Adjustment Mechanism (CBAM) must provide real protection. The phase‑down of free allowances must remain reversible until CBAM’s effectiveness is proven, and the scope of CBAM should be extended to export and downstream sectors. Support to mitigate the impact of ETS on electricity prices must be provided until necessary, ideally in the form of a European mechanism. The use of international credits generated from industrial projects in third countries must be prohibited to avoid an investment leakage detrimental to the European industrial fabric.

Europe must align its climate ambition with a strong industrial strategy, ensuring that decarbonisation strengthens — rather than weakens — Europe’s industrial base and its workforce.