Belgium's Central Bank Warns EUR 200/t Carbon Price Threatens EU Industrial Base
The National Bank of Belgium governor linked the decarbonisation price path to potential deindustrialisation and political radicalisation, sharpening divisions over the EU's ETS overhaul.
The governor of the National Bank of Belgium warned on Wednesday (2026-09-02) that allowing EU carbon prices to reach the EUR 200 per tonne level estimated as necessary to decarbonise European industry by 2050 risked triggering deindustrialisation and boosting support for far-right political parties, Montel reported.7
A warning from a eurozone central banking institution carries different weight than a corporate complaint about compliance costs or a government ministry reacting under competitive pressure. The governor's choice to frame the risk in political as well as industrial terms signals that the debate around ETS ambition has moved well beyond Brussels technical circles.7
The EUR 200/t figure represents an estimated cost trajectory — the allowance price level at which economic pressure would be sufficient to drive deep industrial decarbonisation by mid-century. Getting there from current levels would require sustained allowance price appreciation over multiple decades.7
The EU's ETS reform has already been pulling the system in conflicting directions. In July (2026-07-19), Forbes reported that the overhaul placed roughly 2.4 billion tonnes of CO2 in play, with the date at which the emissions cap reaches zero pushed back from around 2040 to around 2050, meaning allowances would continue to be issued into the 2040s, roughly a decade longer than current law permits. Independent analysis of the published text confirmed the extension.6
That extended supply schedule tends to weigh on near-term allowance prices. Veyt's senior analyst estimated in May (2026-05-20) that one specific ETS adjustment under consideration by the Commission could cut carbon prices by around 13% over the following two years. The Market Stability Reserve, the ETS's built-in supply buffer, automatically reduces auction volumes by 24% when total allowances in circulation exceed 833 million tonnes, but the reform's interaction with that mechanism remained unresolved at the time.1
LSEG, on Thursday (2026-05-21), said political pressure to shield European industry from carbon costs had already weighed on its price outlook for EU allowances, prompting a downward revision to its forward expectations. The data provider did not publish the revised forecast figures.2
Industry is split. As of early July (2026-07-01), European companies were divided over the ETS overhaul — some seeking weaker carbon constraints to protect competitiveness against producers outside Europe, others worried that a lower price signal would undermine the business case for decarbonisation investments already committed.5
Sweden illustrates the stakes on the other side of that divide. Mia Bodin, an independent energy market expert, said on Thursday (2026-05-28) that a weaker carbon price resulting from ETS reform would damage both Sweden's long-term power demand outlook and its industrial decarbonisation trajectory. "It would be serious," she told Montel. Sweden's heavily electrified industrial base stands to lose the investment signal that higher carbon pricing provides for process electrification.3
The Belgian governor's remarks come after EU member states in February (2026-02-18) agreed to extend the price spike regulation mechanism beyond 2030, ahead of the planned expansion of carbon pricing to road transport and buildings. That extension was designed to prevent price shocks from derailing political support for the broader programme. But extending circuit-breakers does not resolve the underlying question of what allowance price trajectory is politically sustainable over a full decade.4
How the Market Stability Reserve responds when total circulation volumes next cross the 833 million tonne threshold is the clearest near-term supply indicator. Beyond that, the Commission's next adjustment to the supply schedule sets the price ceiling for the decade — and, if the Belgian governor's framing takes hold among other policymakers, the political ceiling may arrive well before the physical one.1,6