The European Commission has proposed a sweeping overhaul of the European Union's Emissions Trading System (ETS), the bloc's largest climate change policy. This system impacts several sectors across the continent, including power plants, heavy industry, airlines, and shipping firms.
The proposal seeks to relax the landmark carbon-pricing system to give industries more breathing space to decarbonize. Under these changes, companies would be allowed to continue emitting planet-warming CO2 gases well into the 2040s and retain free carbon permits for a longer duration. Additionally, the plan would allow the use of international carbon credits starting in 2036.
To facilitate these transitions, the Commission is offering increased financial support for investments in clean technologies. These moves come as the European Union faces a green backlash, with emission cuts becoming more difficult and requiring more significant overhauls to industry and livelihoods.
Critics, however, suggest that the overhaul risks weakening Europe's most effective method of cutting planet-heating gases. They argue that the proposal provides companies with a cheaper and less demanding pathway to reducing greenhouse gas emissions.