The European Commission proposed drastic changes to the Emission Trading System (ETS), the EU’s main tool for curbing carbon emissions. Aimed at “boosting competitiveness,” the proposal relaxes industrial climate obligations by delaying decarbonization goals and expanding free pollution permits.
The ETS regulates the EU’s biggest polluters by requiring them to buy annually auctioned emission permits. The Commission proposes slowing the phase-out of these permits, dropping the annual reduction rate from 4.3% to 1.7% by 2036. Furthermore, while member states previously collected €270 billion from permit sales to public budgets, the proposal directs half of future revenues back into the targeted private companies.
Coming in the wake of a record-breaking June heatwave linked to over 10,000 deaths across the EU, the proposal drew harsh criticism from watchdog groups. Brussels-based Carbon Market Watch accused the Commission of “shielding big polluters from paying for the climate damage they are inflicting.”
