Expanding ETS to transport, building and agriculture “not expedient” in light of urgency – Merkel

German Chancellor Angela Merkel has come out against putting a price on CO₂ emissions by expanding the EU Emissions Trading System (ETS) to the transport, building and agriculture sectors. “I believe that the idea that we can convince all European countries to expand the ETS system to the transport, building and agriculture sectors with the required urgency is not expedient because we need unanimous decisions for this. It can’t be done without the European Council,” Merkel told parliamentarians during a question time in the German Bundestag. Instead, she reiterated her call for “a coalition of the willing” among European Union countries – a “special system” outside EU-wide policy. “We will talk to the Netherlands and France in particular about how to tackle the question of CO₂ pricing. Whether that leads to a coalition of the willing, I cannot say today.” Merkel also said that the transport sector had shown itself to be the “most complicated” when it came to climate action, adding that a “multitude of approaches” would be necessary to reach targets.

Merkel had already proposed forming a coalition of the willing at a meeting of EU leaders in May of this year. Germany is increasingly under pressure to find ways to reach European climate targets, especially in buildings and transport, where emissions are stagnating. While the energy sector and big industrial plants are covered by the ETS, other sectors fall under the EU Efforts Sharing scheme. Here, Germany must reduce emissions by 38 percent by 2030 compared to 2005, and it could end up having to pay billions of euros from its state budget to buy emission rights from other countries if it does not manage to significantly lower its greenhouse gas emissions. To avert such payments and bring the country back on track for 2030, Merkel set up the so-called climate cabinet, a group of ministers with key responsibilities related to climate issues, which plans to introduce necessary legislation by the end of 2019. The cabinet will also look into CO₂ pricing as a possible instrument, starting with a meeting on 17 July. Merkel’s conservative CDU/CSU alliance is struggling to find a joint position on the issue and has debated various concepts, from introducing a CO₂ tax to expanding the ETS to transport and buildings.