Q&A: What the EU’s carbon market review means for climate action
The European Commission has proposed new plans to reform the EU's Emissions Trading System (ETS), including extending free allowances for companies and a slower path to reach zero emissions from 2031. While presented as a business-friendly approach, critics argue it could weaken climate targets.
Why it matters
These proposed reforms to the EU's carbon market are critical for the bloc's climate action goals, potentially impacting industries, energy consumption, and the overall pace of decarbonization across Europe.
Share The European Commission has put forward new plans to cut emissions under the EU carbon market more slowly, from 2031 onwards.
On 17 July, the commission presented its long-awaited proposal for reform of the EU’s Emissions Trading System (ETS).
It recommended a number of changes, including giving companies free allowances to cover their emissions for longer than previously planned, conditional on climate investment plans.
The proposal offers a more business-friendly and “savvy” approach, argued EU climate commissioner Wopke Hoekstra in a press conference.
But critics believe it could “weaken” the system and put EU climate targets at risk.
Alongside the proposal, the commission also announced a new target for electricity to make up 46% of energy consumption by 2040, doubling the current rate of 23%.
This could cut EU spending on imported fossil fuels by €260bn annually, according to the commission.
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