According to Ursula von der Leyen, President of the European Commission, the Emissions Trading System (ETS) is currently functioning but requires updates to increase its flexibility. During a press conference following an EU summit, she outlined the need to modernize the ETS to address several key factors that influence electricity prices. These include production costs, network fees, taxes, and the costs associated with emission allowances.

Von der Leyen reiterated earlier proposals made in a letter earlier this week, urging EU member states to leverage existing EU rules to reduce taxes and apply state aid rules more flexibly. This, she said, would assist businesses and households facing difficulties amidst rising energy costs. The Commission plans to introduce legislative proposals aimed at reducing network fees for sensitive sectors and will cooperate with member states to create national schemes to relieve price pressure.

In light of the surging energy prices, von der Leyen emphasized the urgent need for measures that could alleviate economic burdens on citizens and industries. The Commission's focused response could potentially lead to a more robust and adaptable ETS that supports economic stability and sustainability in the EU during challenging energy market conditions.