Industry groups urge German government to reject new conditions on free EU carbon permits

A coalition of fifteen German industry and business groups has sent a formal appeal to the federal government, urging it to resist new EU rules that would condition the distribution of free carbon-allowance allocations on demonstrable climate-investment commitments. The request, spearheaded by VIK, is directed at Environment Minister Carsten Schneider and points out that the EU's draft assumes the availability of mature low-carbon technologies, necessary grid and pipeline infrastructure, and affordable clean energy—conditions the signatories claim are currently lacking.

They stress that free certificates merely relieve part of the cost burden from the EU ETS and cannot be used as a direct financing source for decarbonisation projects. The letter also warns that the required decarbonisation plans would have to be drafted under an as-yet-undefined regulatory framework, creating significant bureaucratic overhead. Since the revised EU-ETS directive is not expected to be adopted until early 2028, with further implementing acts to follow, the industry says reliable investment planning for the 2031-2035 period remains impossible. The signatories include major sector bodies such as the German Chemical Industry Association, the German Steel Federation, and the German Paper Industry, among others.