BRUSSELS – The European Commission proposed an overhaul of the EU’s Emissions Trading System on Friday, allowing industries to emit CO2 longer while offering more financial support to invest in clean technologies in Europe. The ETS is the European Union’s biggest climate change policy. It forces power plants, airlines and shipping firms to buy permits when they emit CO2, and caps their overall emissions.
The EU executive has long been preparing to overhaul the ETS, extending it into future decades and aligning it with the EU’s 2040 climate goal to cut net emissions by 90%.
The plans also respond to pressure from industries and countries, including Italy and Poland, which say it undermines competitiveness. Brussels is attempting to balance those concerns with warnings, including from Spain, that weakening the ETS would punish industries that spent early on cutting emissions.
The Commission proposed cutting the annual rate at which the ETS emissions cap falls to around 3.7% from 2031, and 1.7% from 2036, from 4.3% currently, confirming plans previously reported by Reuters.
The price of EU carbon permits dipped slightly when the plans were announced, with benchmark EU carbon prices down 0.77% at €78.58 per metric ton by 1028 GMT.
