The changes would let companies keep free carbon permits longer and use international carbon credits from 2036.
Smoke billows from a factory during sunset in the northern Spanish town of Torrelavega, Mar 12, 2005. (Photo: REUTERS/Victor Fraile)
18 Jul 2026 03:23AM
BRUSSELS: The European Union on Friday (Jul 17) proposed easing its carbon trading scheme for companies, as it unveiled reforms to one of its flagship climate policies under pressure to shore up industry.The overhaul of the two-decade-old Emissions Trading System (ETS) has been subject to fierce wrangling between countries, industry and activists over the pace of the bloc's climate push. In the face of demands from carbon-intensive economies such as Italy and Poland, Brussels has laid out a series of concessions that will now need to be agreed with all 27 member states and EU lawmakers. Broadly speaking, the reforms would allow European industry in the coming years to carry on carbon emissions for a longer period and at a lower cost than previously set. If they commit to investing in decarbonisation efforts, companies will still be able to obtain free carbon allowances until 2038, instead of 2034 as was previously the case."We are adopting a more business-friendly and, may I say so, savvy approach," said EU climate commissioner Wopke Hoekstra, while insisting the bloc was still sticking to its overall ambitions. Starting in 2036, manufacturers will also be able to purchase international carbon credits by financing decarbonisation projects outside the EU, which would count toward their emissions reductions.Since 2005, the EU's carbon trading system has sought to tackle climate change by curbing pollution from power producers and energy-intensive industries such as steel, cement and chemicals.
