RWE CEO warns German industry at risk without EU ETS reform
Krebber links carbon market reform to industrial survival as Berlin's 11 GW gas tender awaits EC approval ahead of winter.
RWE CEO Markus Krebber said on Thursday (2026-05-21) that parts of Germany's industrial sector risk failing without reforms to the EU Emissions Trading System, even as the country's decarbonisation push continues. His warning lands as Berlin waits on European Commission approval for tenders covering 11 GW of new gas-fired capacity, a scheme the EU executive said on Monday (2026-07-13) it aims to clear "as soon as possible" once a long-term capacity mechanism is introduced.1,6
The stakes are concrete for winter. German gas storage sites were only 30.6% full as of May 27, according to Gas Infrastructure Europe data, well below the 38.65% registered at the same point last year. Uniper CEO Michael Lewis has already warned that Germany faces natural gas shortages this winter unless the pace of filling storage accelerates, calling for incentives to encourage companies to stock up.4
TTF front-month gas traded at €60.29/MWh on Wednesday's close (2026-08-13), down 1.22% on the day but still reflecting a tight supply picture. German power for the front month settled at €134.41/MWh the same session. Both markets have been supported by the loss of roughly 20% of global LNG supply following Iranian missile attacks on Qatar's production and export infrastructure, with European prices running about 40% above pre-war levels.4
The capacity tender itself has become a flashpoint. A requirement that effectively bars batteries from bidding in the planned German capacity market, favouring gas plants instead, received a nod from the European Commission last year, according to a German economy ministry briefing. Documents suggest up to 5 GW of the tender could be affected by the restriction. That design choice has drawn criticism from storage operators, but it reflects Berlin's priority: securing dispatchable thermal capacity before the next winter stress test.5
Krebber's ETS reform call is the other side of the same coin. New gas plants need a carbon price trajectory that justifies their construction costs, and industrial consumers need allowances that do not push energy-intensive production offshore. "The combination" of high gas prices and carbon costs, he argued on Thursday (2026-05-21), threatens segments of German industry that cannot pass those costs through to customers.1
The maths is unforgiving. Germany's power margin is already thinning: wind generation in October and November ran 25% below the same two months of the prior year, and low wind speeds in the week of May 18 pushed available supply to its lowest level so far that winter, according to Bloomberg-compiled models. That was before the LNG supply shock fully priced in. A repeat of weak wind this coming winter, with less Russian pipeline gas as a backstop, would force much harder questions about which industrial demand gets curtailed first.3,4
Berlin still plans to shut its last three nuclear plants in December, a move that will cut electricity supply by 6%. Chancellor Olaf Scholz has not yet buckled on that timeline, despite polls showing some 80% of Germans, including a majority of Greens, favour keeping the plants open for at least a few more months. European allies have pleaded for a delay. The political calculus may shift as winter approaches and the capacity picture tightens further.2
European neighbours have pledged 15% consumption cuts for both industrial and household gas use, which would ease pressure on the shared grid. Additional supply from Qatar, Algeria and the US, plus a temporary switch back to coal for power generation, should get Germany through the winter without rationing, according to earlier analysis. That assessment assumed the nuclear closures hold and the LNG import chain stays intact.2
The EC's blessing of the 11 GW tender is not a foregone conclusion in substance, even if the timing is now clear. Brussels wants to see the full long-term capacity scheme before signing off, and the battery-exclusion clause could yet draw scrutiny from competition officials. Any delay pushes the tender's construction timeline past the 2027-28 winter window, leaving Germany more exposed to the current tightness for longer.6,5
Watch the storage trajectory. At 30.6% full in late May, Germany was nearly eight percentage points behind last year's pace, and the summer filling window is finite. If injection rates do not accelerate by the end of August, Uniper's warning becomes the base case rather than the tail risk. The EC's decision on the gas tender, and any movement on the ETS reform file, will tell traders how much political capital Berlin is willing to spend to avoid that outcome.4,1