Europe wants an electric economy. Weakening the ETS would make it harder to build.

The author contends that weakening the EU Emissions Trading System (ETS) would undermine the transition to an electric economy by removing the financial incentive for companies to shift from fossil fuels to clean electricity. While the Electrification Action Plan provides a target of 46% electrification by 2040, the author asserts that a strong carbon price is required to justify long-term investments in cleaner production and infrastructure. The text highlights a divide within the business community, noting that while some companies lobby for lower carbon costs, others—including SAP, Volvo Cars, and Schneider Electric—advocate for clear rules and faster electrification to reduce exposure to volatile fossil fuel markets.

• The EU Emissions Trading System (ETS) serves as a critical price signal that enables companies to make long-term investment decisions regarding the transition from fossil fuels to technologies such as electric furnaces, heat pumps, and renewable electricity.
• Weakening the ETS would create a perverse incentive where companies that delay investing in clean technology are rewarded, while those already putting capital into cleaner production, transport, and power are penalized.
• The Electrification Action Plan establishes a target of 46% electrification by 2040, but achieving this requires Member States to implement practical measures, including rebalancing taxes to stop punishing electricity relative to fossil fuels, accelerating grid connections, and ending fossil fuel subsidies.
• There is a divergence in the business community's position on carbon pricing; while some seek lower costs, a significant group of companies—including SAP, Danfoss, Volvo Cars, SSAB, Schneider Electric, Unilever, Nikon, Ingka Group | IKEA, and H&M Group—have supported clean electrification and the ETS.

APA

Mendiluce, M. (2026). Europe wants an electric economy. Weakening the ETS would make it harder to build. We Mean Business Coalition. https://www.wemeanbusinesscoalition.org/blog/europe-wants-an-electric-economy-weakening-the-ets-would-make-it-harder-to-build/

Chicago

Mendiluce, María. Europe wants an electric economy. Weakening the ETS would make it harder to build. We Mean Business Coalition, 2026. https://www.wemeanbusinesscoalition.org/blog/europe-wants-an-electric-economy-weakening-the-ets-would-make-it-harder-to-build/.

Wikipedia

{{cite press release |last1=Mendiluce |first1=María |title=Europe wants an electric economy. Weakening the ETS would make it harder to build. |publisher=We Mean Business Coalition |date=14 September 2026 |url=https://www.wemeanbusinesscoalition.org/blog/europe-wants-an-electric-economy-weakening-the-ets-would-make-it-harder-to-build/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{mendiluce2026europe, author = {Mendiluce, María}, title = {{Europe wants an electric economy. Weakening the ETS would make it harder to build.}}, publisher = {We Mean Business Coalition}, year = {2026}, month = sep, url = {https://www.wemeanbusinesscoalition.org/blog/europe-wants-an-electric-economy-weakening-the-ets-would-make-it-harder-to-build/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }