The Center Party and Isamaa parliamentary groups, along with Kersti Sarapuu, Enn Eesmaa, Jaak Valge, Leo Kunnas and Tõnis Mölder, are submitting for proceedings a draft Riigikogu statement to address the European Commission and the parliaments of member states with a proposal to initiate a comprehensive reform of the European Union Emissions Trading System (ETS) and to repeal ETS2.

According to Lauri Laats, chair of the Center Party parliamentary group, the aim of the statement is to ensure affordable electricity for Estonia's residents and to improve the competitiveness of European industry and business, whose decline is becoming a structural problem.

"To achieve this, ETS2 must be repealed, as it extends the CO₂ quota system to fuels used in buildings and road transport, thereby increasing the price of gasoline and diesel," Laats said. "High energy prices, a significant component of which is carbon pricing, negatively affect European companies' production costs, investment capacity and job retention."

Helir-Valdor Seeder, chair of the Isamaa group, added that the European Union Emissions Trading System (ETS) in its current form has become unsustainable.

"The carbon quota system is inherently bureaucratic and open to speculation by market participants. This situation increases uncertainty and undermines the stability of the European business environment. Simply put, it is not sustainable and must be revised," Seeder explained.

According to the draft statement, the Riigikogu would propose that the European Commission initiate the following changes:

1. Reform the European Union Emissions Trading System by replacing the current market-based pricing model with a fixed emissions fee system where the fee would be predictable, moderate and take into account the competitiveness of the European Union's industry and economy;
2. Repeal the ETS2 system, considering its projected impact on housing and transport costs as well as social stability in member states;
3. Design the European Union's CO₂ pricing framework so that it can be coordinated and negotiated with other major economic regions in order to avoid competitive disadvantages for European companies and carbon leakage.

In the coming days, the European Commission is expected to present a proposal to increase the carbon market reserve and create a €30 billion decarbonization fund. This would respond to pressure from European Union leaders to limit the impact of carbon quotas on electricity bills.

Commission President Ursula von der Leyen said the EU executive is working on a package of measures that will provide both immediate relief and structural changes to curb high energy prices. In the coming days, two components of the emissions trading system (ETS) are set to be revised. ETS requires factories and power plants to purchase allowances for every ton of CO₂ they emit into the atmosphere.

"These changes will be introduced in the coming days," von der Leyen said at a press conference following Thursday's EU summit.

The planned steps include updating so-called benchmarks, which determine how many free emission allowances a specific industrial sector receives. There are also plans to strengthen the "firepower" of the Market Stability Reserve (MSR), which regulates the supply of ETS allowances.

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