EU Proposes ETS Overhaul, Slowing Cap Cuts to 3.7% and Extending Carbon Market
Updated
Updated · The Guardian · Jul 17
EU Proposes ETS Overhaul, Slowing Cap Cuts to 3.7% and Extending Carbon Market
3 articles · Updated · The Guardian · Jul 17
Summary
Free pollution permits for sectors such as steel and cement would run until 2038 instead of 2034, while the ETS cap would tighten more slowly—3.7% a year from 2031 and 1.7% from 2036 versus 4.3% now.
The Commission says the changes answer pressure from 10 member states over energy costs and industrial competitiveness, while tying 80% of free permits to companies’ clean-investment plans in Europe.
The overhaul would also bring municipal waste, private jets and flights within a 5,000-km European radius into the carbon market, broadening a scheme credited with cutting ETS-covered emissions 47% since 2005.
Critics including Green lawmakers and WWF say the weaker cap could allow an extra 2 billion tonnes of CO2 and undermine the EU’s legally binding 90% emissions-cut target for 2040; officials insist the plan remains climate-law compliant.
The draft now goes to the 27 member states and European Parliament, becoming a test of whether the EU can balance decarbonisation with competitiveness after the latest fossil-fuel price shock.