EU's von der Leyen rebuffs Polish call to suspend carbon market

European Commission President Ursula von der Leyen on Tuesday rebuffed a call by Poland for the EU to temporarily suspend its emissions trading system (ETS) to help rein in high power prices.

European Commission President Ursula von der Leyen on Tuesday rebuffed a call by Poland for the EU to temporarily suspend its emissions trading system (ETS) to help rein in high power prices. At an energy summit in Copenhagen, Polish Prime Minister Mateusz Morawiecki suggested suspending the ETS system, the European Union's main tool for reducing carbon emissions and meeting climate change targets.

"Why add another 90 or 100 euros in the form of ETS allowances to already very high electricity prices. We can revert back to the system the moment we secure energy for all of Europe and we bring back peace to Ukraine," Morawiecki said at a news conference. The ETS forces power plants and industries to buy permits when they produce CO2 emissions, providing a financial incentive to pollute less, to dodge the carbon costs. That feeds into the cost of power, but CO2 costs have not been the main contributor to the recent surge in European power prices. Von der Leyen said ETS costs were contributing around 6% of the electricity price, versus 94% caused by other factors - mainly, the surging price of gas.

"We need the emission trading system to cut CO2 emissions," she said. Instead, she said, the EU is working on an emergency tool and a structural reform of the EU's electricity market to bring down power costs.

Poland, which produces most of its power from coal, has previously called for the EU to stop financial speculators from trading EU carbon permits, which Warsaw says has helped push up the permit price.