New Czech Minister of Industry and Trade Karel Havlicek has announced his government’s categorical rejection of the European Union’s upcoming emissions trading system, known as ETS2. This mechanism, scheduled for 2028, is set to apply to the building and road transport sectors as part of the EU’s Green Deal. The Czech government considers the measure will impose a disproportionate financial burden on households and businesses.
An estimated annual cost of CZK40bn
The government, led by Prime Minister Andrej Babis and composed of populist and far-right parties, made ETS2 one of its first points of opposition to Brussels. According to estimates provided by Czech authorities, participating in the scheme would cost the national economy approximately CZK40bn ($1.92bn) annually, an amount considered higher than any potential penalties for non-compliance.
Havlicek stated that this position is not about isolation but about pushing for a reform of the European system. “We want to be the country leading a fundamental overhaul of the scheme,” he said, while also seeking to rally other member states around this opposition.
Imbalance with major global powers
The Czech Republic, home to a significant automotive industry, has long denounced high energy prices. Recent Eurostat data shows household electricity prices were among the highest in the Union in the first half of the year.
The minister compared the European approach to a car speeding toward a wall while congratulating itself for being electric, stressing that climate targets are undermining competitiveness against countries like China and the United States. “We must start keeping pace with the great powers,” he stated, voicing concern that investment may shift to regions offering more favourable business conditions.
Havlicek added he refuses for Czech industry to become “a doormat” for China and warned that local companies, including those involved in climate technologies, may relocate to the United States due to lower input costs.
