EU's von der Leyen defends carbon market after leaders' criticism

Ursula von der Leyen, President of the European Commission, said that the European Union's emissions trading scheme has "clear benefits" and safeguards in place to reduce the price of?carbon? if the price rises too much.

Leaders of Germany, Italy, and the Czech Republic said this week that the EU should reconsider its ETS. This comes amid industry calls to reduce the price they impose on pollution.

Von der Leyen said at a press conference following a summit of EU government leaders, that the ETS was vital for the 'clean tech industries' whose investments are dependent on a reliable price for CO2. She claimed that the ETS had brought in 200 billions of euros to the national budgets since 2005.

"The ETS also has elements where you can modulate the price if the price is too high for whatever reason, or if the economic conditions are difficult, with the'market stabilization reserve'," von der Leyen added. The Commission will examine these elements during a upcoming review due in July.

On Thursday, German Chancellor Friedrich Merz defended the ETS after saying Wednesday that the EU should be "open to revising or delaying it".

There are some colleagues who are highly critical. This criticism is not mine. Merz, who spoke to reporters after the summit on Thursday, said that Europe has implemented an effective "instrument" that allows growth without generating CO2 emissions.

Merz, when asked about his remarks on Wednesday said that the ETS was designed to encourage innovation through pricing CO2 emissions. "This 'purpose must be reviewed regularly." "If we achieve this goal, we can improve on it," he said.

ETS "forces" power plants and industry to "buy CO2 permits, when they pollute. This provides a financial incentive for reducing emissions. After leaders suggested a revision of the policy, the price of EU carbon certificates fell on Thursday.

(source: Reuters)