{"id":15157,"date":"2025-07-30T09:43:50","date_gmt":"2025-07-30T09:43:50","guid":{"rendered":"https:\/\/axevera.com\/?p=15157"},"modified":"2025-07-30T09:43:51","modified_gmt":"2025-07-30T09:43:51","slug":"czechias-energy-sensitive-industries-reaction-to-ets-and-cbam-requirements","status":"publish","type":"post","link":"https:\/\/axevera.com\/en\/2025\/07\/30\/czechias-energy-sensitive-industries-reaction-to-ets-and-cbam-requirements\/","title":{"rendered":"Czechia\u2019s Energy-Sensitive Industries&#8217; Reaction to ETS and CBAM Requirements"},"content":{"rendered":"\n<p>In an open letter to the Czech Prime Minister, industry associations representing companies from five energy-intensive sectors stated that companies are facing a contradictory situation with the adoption of decarbonization goals. While new measures regarding emission allowances are taking force starting next year, industries are already experiencing problems with funding the transformation of energy sources to more sustainable options. Even though the state was granted a fair proportion of sources, industries struggle, risking their stability and competitiveness. While these sectors form a core part of the Czech economy, with a strong reliance on exports, they must now balance between meeting environmental objectives and maintaining economic stability.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"683\" src=\"https:\/\/axevera.com\/wp-content\/uploads\/2025\/07\/ChatGPT-Image-30-lug-2025-11_25_59-1024x683.png\" alt=\"\" class=\"wp-image-15150\" srcset=\"https:\/\/axevera.com\/wp-content\/uploads\/2025\/07\/ChatGPT-Image-30-lug-2025-11_25_59-1024x683.png 1024w, https:\/\/axevera.com\/wp-content\/uploads\/2025\/07\/ChatGPT-Image-30-lug-2025-11_25_59-300x200.png 300w, https:\/\/axevera.com\/wp-content\/uploads\/2025\/07\/ChatGPT-Image-30-lug-2025-11_25_59-768x512.png 768w, https:\/\/axevera.com\/wp-content\/uploads\/2025\/07\/ChatGPT-Image-30-lug-2025-11_25_59-900x600.png 900w, https:\/\/axevera.com\/wp-content\/uploads\/2025\/07\/ChatGPT-Image-30-lug-2025-11_25_59.png 1536w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Czech Industrial Production Levels<\/h2>\n\n\n\n<p>Czech industrial production continues to show positive development, particularly in manufacturing, with steady year-on-year growth. In May 2025, the value of new industrial orders (at current prices) in monitored sectors increased by 5.0% compared to the same period last year.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>New foreign orders rose by 7.2% year-on-year.<br><\/li>\n\n\n\n<li>Domestic orders recorded a 1.0% increase.<br><\/li>\n<\/ul>\n\n\n\n<p>\u201cThe growth in the value of new industrial orders in May was mainly driven by the production of motor vehicles. This growth was also partly influenced by a lower comparison base. Furthermore, the value of new orders increased year-on-year in the sectors of production of metal structures and metal products or electrical equipment,\u201d says Irena Stup\u0148\u00e1nkov\u00e1 from the Department of Industry Statistics of the Czech Statistical Office.<\/p>\n\n\n\n<p>Czechia continues to demonstrate stability in its industrial sector, supported by consistent demand in automotive and metal production. In this context, the availability of emissions allowances and competitive energy prices are viewed as essential for maintaining a secure and balanced industrial economy.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Trade Considerations<\/h2>\n\n\n\n<p>The temporary suspension of decarbonization funding also has potential implications for international trade. As an export-dependent economy, Czechia trades extensively with countries such as China, the United States, and Turkey, which are not currently subject to EU&nbsp; regulations. This creates a potential challenge: as Czech producers adapt to new environmental regulations and associated costs, they may face increased pressure when competing with suppliers from regions where such environmental restrictions are not implemented.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Financial obligations<\/h2>\n\n\n\n<p>In 2023, Czech imports of CBAM-covered goods were estimated at approximately <strong>\u20ac2.2 billion for iron and steel<\/strong>, <strong>\u20ac900 million for aluminium<\/strong>, and <strong>\u20ac300 million for fertilisers<\/strong>. A large share of these imports came from <strong>non-EU countries<\/strong> like <strong>China, Turkey, Ukraine, and Belarus<\/strong>\u2014regions not subject to the EU\u2019s ETS. As a result, starting in 2026, Czech importers may face an annual cost exposure of approximately <strong>\u20ac200 to \u20ac400 million<\/strong> in CBAM certificates alone, depending on import volumes and prevailing allowance prices.<\/p>\n\n\n\n<p>Phase out of free allowances possibly might cost Czechia <strong>\u20ac800 million and \u20ac1.1 billion annually<\/strong> by the end of the decade. As a result, manufacturers may face increased production costs.<\/p>\n\n\n\n<p>Czech industry representatives propose a package of support measures to help industrial sectors manage rising energy and carbon costs under EU climate policy. These include introducing a zero tax rate on natural gas and reducing network charges for both electricity and gas; maintaining and extending free allocations of CO\u2082 allowances despite the phased introduction of CBAM; ensuring stability and predictability in indirect cost compensation while expanding it to cover additional key chemicals such as ammonia; and introducing temporary state support for industrial users of gas, electricity, and CO\u2082 allowances if prices remain elevated after 2025, with suggested reference price caps of \u20ac20\/MWh for gas, \u20ac50\/MWh for electricity, and \u20ac35 per tonne for CO\u2082.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Modernisation (Decarbonization) Fund and Other Optional Funds<\/h2>\n\n\n\n<p>The Modernisation Fund is a core EU financing mechanism, derived from <strong>2\u20132.5% of the auction revenues<\/strong> from the EU Emissions Trading System (ETS), designed to aid 13 lower-income member states\u2014including Czechia\u2014in <strong>modernizing energy systems<\/strong>, enhancing <strong>energy efficiency<\/strong>, and supporting the green transition in carbon-intensive regions. As of summer 2025, the Czech Republic has been awarded approximately <strong>\u20ac1.05\u202fbillion<\/strong> in the <strong>largest disbursement round<\/strong> to date, focused on projects like energy storage and grid upgrades. Nevertheless, industry representatives addressed the problem of lack of the transparency from the state&#8217;s administration.&nbsp;<\/p>\n\n\n\n<p>To diversify financial contributions to projects, other funds are available. As so far <strong>Modernisation Fund<\/strong> and the <strong>Innovation Fund, <\/strong>as the main EU-ETS funds are imposed, sources, that are not dependent on EU distribution are available. They include <strong>Just Transition Fund<\/strong>, which supports coal-dependent regions, <strong>Recovery and Resilience Facility<\/strong>, <strong>Cohesion and Regional Development Funds<\/strong>, and national programmes managed by the <strong>State Environmental Fund<\/strong> and <strong>Technology Agency of the Czech Republic<\/strong>. Together, these mechanisms provide significant financial support for projects aimed at reducing emissions, improving energy efficiency, and advancing green innovation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>Czechia\u2019s industrial base shows resilience for transitioning to a net zero economy.. With the intersection of sustainability requirements and global trade competitiveness, industry facing a complex landscape, with an unclear operational vision. The Czech Republic is currently facing significant challenges due to its heavily industrial economy and a delay in adopting lower CO\u2082-emission technologies\u2014innovations that have already been implemented in neighboring countries. As a result, the country is falling behind compared to other EU member states. This gap, however, can be narrowed through more targeted national policies, provided the government prioritizes these innovations and allocates sufficient budget to support their development and deployment. Energy-sensitive industries emphasize the need for balanced support and predictable regulatory conditions, requiring country\u2019s prime minister to regulate funding problem without risking industry\u2019s position on the world trade map.<\/p>\n\n\n\n<p><em>AI-generated image.<\/em><\/p>\n\n\n\n<p><em>Sources:<\/em><\/p>\n\n\n\n<p><a href=\"https:\/\/vlada.gov.cz\/cz\/media-centrum\/aktualne\/premier-fiala-po-jednani-evropske-rady-klimaticke-cile-musi-byt-realisticke--jinak-poskodi-konkurenceschopnost-evropy-220409\/#\">https:\/\/vlada.gov.cz\/cz\/media-centrum\/aktualne\/premier-fiala-po-jednani-evropske-rady-klimaticke-cile-musi-byt-realisticke&#8211;jinak-poskodi-konkurenceschopnost-evropy-220409\/#<\/a><\/p>\n\n\n\n<p><a href=\"https:\/\/zpravy.kurzy.cz\/821787-green-deal-narazi-cim-dal-vic-uz-5-domacich-oborovych-svazu-tlaci-na-vladu\">https:\/\/zpravy.kurzy.cz\/821787-green-deal-narazi-cim-dal-vic-uz-5-domacich-oborovych-svazu-tlaci-na-vladu<\/a><\/p>\n\n\n\n<p><a href=\"https:\/\/zpravy.kurzy.cz\/821798-otevreny-dopis-predsedovi-vlady-ceske-republiky-zastupci-energeticky-narocneho-prumyslu\">https:\/\/zpravy.kurzy.cz\/821798-otevreny-dopis-predsedovi-vlady-ceske-republiky-zastupci-energeticky-narocneho-prumyslu<\/a><\/p>\n\n\n\n<p><a href=\"https:\/\/www.kurzy.cz\/makroekonomika\/prumysl\">https:\/\/www.kurzy.cz\/makroekonomika\/prumysl<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In an open letter to the Czech Prime Minister, industry associations representing companies from five energy-intensive sectors stated that companies are facing a contradictory situation with the adoption of decarbonization&#8230;<\/p>\n","protected":false},"author":5,"featured_media":15154,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[525],"tags":[],"yst_prominent_words":[],"class_list":{"0":"post-15157","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-en"},"_links":{"self":[{"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/posts\/15157","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/comments?post=15157"}],"version-history":[{"count":1,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/posts\/15157\/revisions"}],"predecessor-version":[{"id":15158,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/posts\/15157\/revisions\/15158"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/media\/15154"}],"wp:attachment":[{"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/media?parent=15157"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/categories?post=15157"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/tags?post=15157"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/yst_prominent_words?post=15157"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}