EU Commission Proposes Softer Carbon Market Rules for Industry
The overhaul would slow the emissions cap cut, extend free permits and add new sectors as Brussels faces pressure over industrial competitiveness.
- On Friday, the European Commission proposed an overhaul of the European Union's Emissions Trading System , introducing reforms to extend the scheme into the 2030s and align it with the bloc's 2040 climate goal.
- Member states like Italy and Poland demanded looser carbon market rules to protect domestic industries from rising costs, prompting the Commission's shift toward greater business flexibility.
- The proposal reduces annual emissions cap cuts to 3.7% from 2031, extends free industrial permits until 2038 for companies committing to decarbonization, and mandates 50% of ETS revenues be reinvested domestically.
- Negotiations with the European Parliament will follow over the next year, though the American Chamber of Commerce warned extending ETS to international flights risked "potentially provoking retaliatory measures from key international partners."
- Integrating carbon removals into the ETS for the first time, these reforms position the system to support the European Union's 2040 target of reducing net greenhouse gas emissions by 90%.
132 Articles
132 Articles
The EU Commission has presented its proposals for a relaxation of European emissions trading, which differs from its previous climate protection plans. Critics fear a dilution.
The EU Commission wants to ease the rules for emissions trading with pollution rights for carbon dioxide. It is planned that the annual ceiling for industrial CO2 emissions will decrease more slowly from 2031 onwards than previously foreseen. Companies could thus emit more greenhouse gases for longer.
The European Commission proposes to slow down the reduction of emission allowances, to extend aid conditional on decarbonisation and to strengthen the electrification of the economy, which triggers criticism by environmentalists and aviation alike.
The European Commission will make it a little easier for companies to continue emitting CO2, but promises to achieve its climate target.
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