Germany is pushing the European Union to ease emissions reduction rules for its industrial sectors, citing higher energy costs. Under the EU Emissions Trading System (EU ETS), free carbon allowances for aviation will end next year and will be gradually phased out for all industries by 2034.

German Economy Minister Katerina Reiche said that Berlin must reach an agreement with the European Commission for companies unable to meet the bloc’s climate targets. She also pointed out that the country must expand the free allocation of quotas. Otherwise, it will lose vital industries in our country.

ThyssenKrupp AG recently also urged a slower phase-out of free quotas, while the IGBCE union said the rules threatened their business. Meanwhile, the European Commission plans to expand the scope of the Carbon Border Adjustment Mechanism (CBAM) and curb circumvention. Germany’s economy continues to face pressure from US tariffs and rising energy prices.