Peter Liese, the German member of the European Parliament and lead negotiator for the last revision of the European emissions trading system expressed concerns that excessive carbon prices would harm the industry sector.

“Too high an ETS price can accelerate the decline in industrial production in the European Union, because the decarbonization in industry does not work that quickly” warned Liese on his webpage. He also pointed out that the main problem is the decline in industrial output rather than the ETS price.

“We do not need a deindustrialization of Europe, but a decarbonization of industry. Firstly, because otherwise we will lose our prosperity and secondly, because otherwise we will not be a role model for the rest of the world,” said Lise.

In an interview for EURACTIV, the German MP who is also the environmental policy spokesperson for EPP, the largest political group in the EU Parliament, blamed the crash of the carbon price on the energy crisis and subsequent drops in the industrial output. “The companies that act as buyers of ETS certificates have produced less and therefore purchased fewer certificates. This is the main reason for the price slump,” he explained.

Liese also admitted that the decline in carbon prices was also somehow intended. “As the EPP Group, we have deliberately emphasized, both in the context of the ETS and REPowerEU, that we do not want to push the price to extremes now.” However, in the long term, he warned that carbon prices should rise again “probably well above” €100. 

The interview needs to be understood in a broader context as it comes a month ahead of the elections. Polls indicate that populist radical right parties are gaining momentum across Europe while support for green and center-left is waning despite the next years being decisive for global climate action.