With its recent proposal to ease the CO₂ emissions trading system, the European Commission acknowledged what European companies, industrial leaders and consumers have been saying for years: the CO₂ quota policy (ETS) is destroying Europe's economy.

Brussels' wavering is significant. For decades, Europe's climate policy has been based on the assumption that if Europe quickly reduces its CO₂ emissions, the rest of the world will follow. Reality has been the opposite. The largest economies — especially the United States, China and India — continue to increase industrial production, and global CO₂ emissions have grown each year instead of falling.

As a result, the dream of climate activists — carbon neutrality — is becoming increasingly unrealistic, while Europe keeps making its own economy less competitive. If a European company must pay ever‑higher carbon penalties while a competitor in China or the United States does not, production moves to countries without restrictive regulations. Europe loses investment, jobs and tax revenue. Energy prices rise, making nearly every product and service more expensive.

Even though Brussels is beginning to grasp reality, the current easing measures stop halfway. Cosmetic fixes are offered, but pressure on industry remains. Smaller penalties or exemptions are promised only if industries continue investing in green technology.

Leaders in Estonia's oil shale sector have already said these measures do not help them, because the core logic of the ETS remains unchanged. That means Europe's industries are still expected to decarbonize even though the rest of the world laughs at Europe's self‑destructive policy. The European Commission has also confirmed that the ETS successor, ETS 2 — which will impose carbon penalties on vehicle fuel and home heating in a few years — will remain in force.

Even more, the European Commission has taken the position that while some concessions may be made in enforcing the ETS, it is determined to eliminate the oil shale sector entirely. For Estonia, that would mean giving up energy security and the ability to produce cheap electricity. Several thousand people in Ida‑Virumaa would lose their jobs.

A window of opportunity

Given all this, Estonia cannot remain an innocent bystander. The moment is right to use the momentum and make Estonia's voice heard more clearly in Brussels. Estonia should aim to stop the ETS or reform it so the system does not harm Europe's competitiveness.

We must break the habit of the Estonian government adjusting its policies according to the European Commission's proposals. In reality, it should be the opposite: Estonia must actively participate in shaping the proposals the Commission brings to the table. Our country has all the tools to do so.

The European Union is not an institution that rules member states. It is a union of member states whose governments jointly shape Europe's political direction. The European Commission acts on a mandate from member states, not the other way around. Every member state has a duty to defend its national interests.

A member state can block decisions or use its approval as leverage until its positions are taken into account. Germany, France, Italy and Poland do this consistently when their economic or strategic interests are at stake. Estonia should not be afraid to use the same political tools as a country with veto power.

The last obedient soldier of the green transition

Unfortunately, Estonia's current government seems to be moving in the opposite direction. Energy and Environment Minister Andres Sutt recently suggested on Vikerraadio that Estonia wants to be the last obedient soldier of the green transition. Even now, after the European Commission's easing measures, he believes Estonia should not make "sharp U‑turns," and that Europe's competitiveness depends mainly on how quickly clean technologies are adopted. As for the government's next steps, Sutt said "autumn will bring clarity" and "we'll see where we end up."

These attitudes show that the government coalition has neither the desire nor the strength to push for stopping or fundamentally reforming the quota system at the European level. The Reform Party, Eesti 200 and other green‑transition activists have focused more on accelerating the current course than asking whether that course serves Estonia's and Europe's interests at all.

But political situations change. In the spring, after new power dynamics emerge following the Riigikogu elections, Estonia will likely have an opportunity to defend its economic interests more actively within Europe.

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