Finnish Industries: EU ETS must remain a credible driver of decarbonisation

Finnish Industries EK stresses that the parliament and the council should not weaken the Commission’s proposed emissions reduction trajectory in their own negotiation positions. A predictable emissions cap is essential for maintaining confidence in low-carbon investments and achieving the EU’s 2040 and 2050 climate objectives.

The Confederation of Finnish Industries EK considers the European Commission’s proposal to reform the EU Emissions Trading System (ETS1) for 2031–2040 a broadly balanced package that takes into account the current challenging economic and geopolitical environment. At the same time, the reform must preserve the ETS as a credible and effective tool for reducing emissions while providing the long-term predictability needed for clean transition investments.

EK also highlights the importance of recognising frontrunner companies that have already invested heavily in emissions reductions. ETS rules should support industrial transformation without penalising early movers or creating unnecessary administrative burdens.

The next phase of the ETS should create clear and investment-friendly rules for carbon capture, utilisation and storage (CCUS) as well as certified permanent carbon removals. Technological neutrality and market-based solutions must remain at the core of the system.

At the same time, Europe must safeguard industrial competitiveness and effective carbon leakage protection throughout the transition. The phase-out of free allocation and the roll-out of the Carbon Border Adjustment Mechanism (CBAM) should proceed in a coherent manner, ensuring that European industry remains competitive while continuing to invest in decarbonisation.

“The EU ETS has proven to be the Union’s most effective climate policy instrument. The priority now is to strengthen its credibility, support investment certainty and ensure that climate ambition goes hand in hand with industrial competitiveness”, states director Ulla Heinonen.

Finnish Industries’ position paper on EU ETS.