The carbon pricing overhaul means factories and coal power plants could continue business as usual into the 2040s
The European Commission will today present a reform of its flagship industrial carbon pricing scheme, the first of many overhauls of climate and energy laws as the EU moves further from the Green Deal of the early 2020s towards more pro-industry and electrification policies.
The bloc’s most effective climate policy over two decades has been the carbon price on industrial emissions – the Emissions Trading System (ETS) – under which factory and power plant operators currently pay around €80 for every tonne of CO2, or equivalent, they emit.
Since 2005, emissions in the sectors covered have roughly halved, reducing annual greenhouse gas emissions by the equivalent of about a billion tonnes – with the electricity industry contributing most through the shift from coal to cleaner gas and renewable wind and solar power.
But heavy industry is feeling the pinch as the generous free allocation of emissions allowances they have enjoyed since the 2010s dries up.
