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BRUSSELS, July 8 (Reuters)\u00a0\u2013\u00a0The\u00a0European Union could allow industry to emit CO2 for longer and give companies more free carbon permits under\u00a0plans\u00a0drafted by the bloc to make its emissions<\/a> trading system more flexible, a\u00a0European Commission official said on Wednesday.<\/p>\n The\u00a0EU\u00a0ETS is the bloc\u2019s main policy for addressing climate change. It forces power plants, industries, shipping firms and airlines to buy permits when they emit CO2, providing a financial incentive to pollute as little as possible.<\/p>\n The Commission will propose an overhaul of the ETS on July\u00a017.<\/p>\n The revision aims to align the ETS with a target passed by the bloc last year to cut\u00a0overall\u00a0EU\u00a0emissions by 90% by 2040, and address some governments\u2019 concerns that the scheme hampers\u00a0European industries\u2019 competitiveness.<\/p>\n The Commission will propose extending the ETS to let companies keep emitting into the 2040s, said the Commission official, who spoke on condition of anonymity because the\u00a0plans\u00a0are not final. In its current form the ETS would\u00a0effectively cut off emissions in 2039.<\/p>\n It\u00a0will also propose giving industries more free CO2 permits, reducing their ETS bill, in exchange for them investing in\u00a0European\u00a0decarbonisation, the official said.<\/p>\n This will include finding a way to give free CO2 permits to industries covered by the\u00a0EU\u2019s carbon border tax for longer, something Brussels had previously said would have to stop when the border levy fully applies in 2034.<\/p>\n The Commission will also propose fast-tracked changes to the rules determining how many free emissions permits the EU\u00a0gives industries based on heat production and fuel use.<\/p>\n This plan could grant companies an extra EU 6 billion ($6.85 billion) in free permits, the official said.<\/p>\n Other planned changes include lowering the \u201clinear reduction factor\u201d which determines how fast companies in the ETS must cut their emissions each year. Currently, this dictates that emissions fall by 4.3% per year.<\/p>\n The proposal will also require national governments to spend more of the revenues they collect from the ETS on investing in industries that pay CO2 costs, the official said.<\/p>\n The proposals are being developed inside the\u00a0European Commission and could still change. Once published, they must be negotiated and approved by the\u00a0European Parliament and\u00a0EU\u00a0countries, a process that takes months.<\/p>\n Among the issues still being debated is how and when to integrate international carbon offset credits into the ETS, the official said.<\/p>\n Brussels also\u00a0plans\u00a0to extend a fund that uses revenues from selling CO2 permits to help poorer\u00a0EU\u00a0nations transition to clean energy, a key demand of nations including Poland.($1 = 0.8763\u00a0euros)<\/p>\n (Reporting by Kate Abnett, editing by Inti Landauro and Jan Harvey)<\/p>\n (c) Copyright Thomson Reuters 2026.<\/p>\n Editorial Standards<\/a> \u00b7 Corrections<\/a> \u00b7 About gCaptain<\/a><\/p>\n This article contains reporting from Reuters, published under license.<\/p>\n \t\t Sign up for gCaptain\u2019s newsletter and never miss an update<\/p>\n \u2014 trusted by our 104,748 members<\/p>\n","protected":false},"excerpt":{"rendered":"BRUSSELS, July 8 (Reuters)\u00a0\u2013\u00a0The\u00a0European Union could allow industry to emit CO2 for longer and give companies more free…\n","protected":false},"author":2,"featured_media":89958,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[822,39,37329,40],"class_list":["post-89957","post","type-post","status-publish","format-standard","has-post-thumbnail","category-eu","tag-carbon-emissions","tag-eu","tag-eu-carbon-market","tag-european-union"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/89957","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/comments?post=89957"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/89957\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media\/89958"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media?parent=89957"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/categories?post=89957"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/tags?post=89957"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"logo\"\/](\"https:\/\/gcaptain.com\/wp-content\/themes\/gCaptain-Theme\/assets\/images\/gcaptain-new-gray-logo.svg\"){kind=logo}
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