Czech business association: Trading in ETS 2 allowances will lead to unpredictable prices

Trading in ETS 2 emissions allowances will have an unpredictable impact on prices in EU member states and lead to the unjustified enrichment of entities that have nothing to do with climate sustainability and are free-riding on established climate targets. The Czech Association of Entrepreneurs and Tradespeople told the Czech News Agency (ČTK) today. The EU ETS 2 system is set to introduce allowances for emissions from transport and household heating and is due to begin operating in 2027. The association is calling on Czech ministries to publish impact assessments and measures for implementing ETS 2 in their respective portfolios.

Czechia and 18 other EU countries are pushing for a price cap of 45 euros (1,090 crowns) per tonne of carbon dioxide (CO2). Prime Minister Petr Fiala (ODS) said last Thursday that the Commission would accept the proposal submitted and prepare a plan to set a cap on the new allowances. The original Czech goal was not to introduce these emissions allowances, but so far it has not been possible to secure a majority for this in the EU.

The Czech Association of Entrepreneurs and Tradespeople is calling on ministries to initiate talks at EU level and publish a study on the impact ETS 2 will have on the economies of member states. It wants the start date to be postponed until the subsequent legislative process has been completed in member states.

The association said it contacted several ministries in 2024 to ask how the impact of the ETS 2 directive was being assessed in their respective portfolios. According to the association, the directive will have a significant impact on the business environment for self-employed people and small companies, as well as on residents of the Czech Republic. So far, it said, only the Ministry of Agriculture had responded, and only in very general terms. “The other ministries have not responded, despite our reminder sent to them in February 2025. We consider this situation extremely unsatisfactory,” the association said.

Under the emissions allowance system, one allowance permits the release of one tonne of carbon dioxide into the atmosphere, or an equivalent amount of another gas. EU member states are to use the revenue from their sale for climate protection measures.