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BRUSSELS, July 17 (Reuters)\u00a0\u2013\u00a0The\u00a0European Commission proposed an overhaul of the\u00a0EU\u2019s Emissions Trading System on Friday, allowing industries to emit CO2<\/a> longer while offering more financial support to invest in clean technologies in\u00a0Europe.<\/p>\n The ETS is the\u00a0European Union\u2019s\u00a0biggest climate change policy. It forces power plants, airlines and shipping firms to buy permits when they emit CO2, and caps their overall emissions.<\/p>\n The\u00a0EU\u00a0executive has long been preparing to overhaul the ETS, extending it into future decades and aligning it with the\u00a0EU\u2019s 2040 climate goal to cut net emissions by 90%.<\/p>\n The plans also respond to pressure from industries and countries, including Italy and Poland, which say it undermines competitiveness.<\/p>\n Brussels is attempting to balance those concerns with warnings, including from Spain, that weakening the ETS would\u00a0punish industries\u00a0that spent early on cutting emissions.<\/p>\n 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.<\/p>\n MORE FREE PERMITS<\/p>\n The price of\u00a0EU\u00a0carbon permits dipped slightly when the plans were announced, with benchmark\u00a0EU\u00a0carbon prices\u00a0CFI2Zc1\u00a0down 0.77% at \u20ac78.58 per metric ton by 1028 GMT.<\/p>\n The\u00a0EU\u00a0gives industries some\u00a0EU\u00a0CO2 permits for free to help them stay competitive. The Commission has proposed rules to give industries more free permits for longer, with conditions.<\/p>\n The\u00a0EU\u00a0would give 80% of the free permits upfront to companies with plans to invest in decarbonisation in\u00a0Europe. Companies would get the remaining 20% once those investments are made.<\/p>\n The Commission proposed continuing free permits until 2038 for sectors including steel and cement manufacturing rather than ending them in 2034, when they were due to be replaced by the\u00a0EU\u2019s carbon border charge on imports.<\/p>\n That would also delay the full phase-in of the carbon border levy to 2038 from 2034.<\/p>\n \u201cIf we deliver on this plan, it would literally mean hundreds of billions in additional investments on\u00a0European soil,\u201d\u00a0EU\u00a0climate commissioner Wopke Hoekstra told a news conference.<\/p>\n \u201cFree allocation does not mean free cash,\u201d he added.<\/p>\n The ETS has generated \u20ac260 billion in revenue since 2013. The\u00a0EU\u00a0proposed stricter rules on how governments spend that revenue, so that 50% is reinvested in decarbonising the industries covered by the ETS.<\/p>\n But that may face resistance from governments that use ETS revenue to fill holes in public finances.\u00a0Ten countries,\u00a0including Poland and Italy, opposed parts of the\u00a0EU\u00a0plans this week, including attaching conditions to industries\u2019 free permits.<\/p>\n EU\u00a0countries and lawmakers will negotiate the final ETS revision over the next year.<\/p>\n BROADER BACKLASH<\/p>\n The long-planned ETS revision comes amid political pushback against\u00a0Europe\u2019s climate agenda, despite record-breaking heatwaves and wildfires.<\/p>\n The Commission also set out plans on Friday\u00a0to double\u00a0the share of\u00a0EU\u00a0energy consumption met by electricity by 2040, a move aimed at cutting the bloc\u2019s reliance on oil and gas and meeting climate goals.<\/p>\n That is despite the\u00a0EU\u00a0weakening other environmental rules in recent months for cars and farmers, after industry concerns.<\/p>\n Some governments have urged the\u00a0EU\u00a0to uphold ambition on the ETS, partly because a weaker ETS would increase pressure on politically sensitive sectors, such as farming and forestry, to cut emissions faster.<\/p>\n The system covers 40% of all\u00a0EU\u00a0emissions, and emissions from ETS-covered sectors have halved since 2005.<\/p>\n The Commission proposal would expand the ETS to cover waste incineration from 2031, smaller ships, and emissions from international flights departing\u00a0Europe for destinations up to 5,000 km (3,107 miles) from the continent\u2019s geographic center from 2029.<\/p>\n That would capture emissions from flights to hubs in Turkey and the Middle East, but exclude the U.S.<\/p>\n The American Chamber of Commerce this week warned extending the\u00a0EU\u00a0ETS to international flights risked \u201cpotentially provoking retaliatory measures from key international partners.\u201d<\/p>\n ($1 = 0.8740\u00a0euros)<\/p>\n (Reporting by Kate Abnett; Editing by Rod Nickel 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 104,581 members<\/p>\n","protected":false},"excerpt":{"rendered":"BRUSSELS, July 17 (Reuters)\u00a0\u2013\u00a0The\u00a0European Commission proposed an overhaul of the\u00a0EU\u2019s Emissions Trading System on Friday, allowing industries to…\n","protected":false},"author":2,"featured_media":97037,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[822,39,37329,40],"class_list":["post-97036","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\/97036","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=97036"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/97036\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media\/97037"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media?parent=97036"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/categories?post=97036"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/tags?post=97036"}],"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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