Germany asks EU to ease CO2 emission reduction requirements

Germany is asking the European Union to ease CO2 emission reduction targets for industry amid rising energy prices.

The rules of the EU's CO2 emissions trading system are being tightened considerably from next year. Free allowances and carbon units will be phased out for aviation and phased out for all sectors by 2034.

As a result, most industrial companies will be required to buy carbon credits to offset their emissions. For German companies suffering from high energy prices, buying quotas may prove too much of a burden.

"We must extend the free distribution period, otherwise we will lose the most important industries in our country," Bloomberg quotes German Economy Minister Kathe Reiche as saying.

One of the pillars of the German economy, steelmaker ThyssenKrupp last month called for a slower phase-out of the free quotas, while the IGBCE union of mining, chemical and energy workers said the rules could "kill all business".

Germany is still struggling to overcome a prolonged economic downturn while also grappling with rising U.S. tariffs and rising energy prices following sanctions against Russia. The country's chemical plants were running at just 72% of capacity in the second quarter, the lowest level in more than 30 years.