EU Eases Pace of Emission Cuts for Industry in Major Climate Policy Shift
The European Union has proposed significant changes to its flagship climate policy, allowing businesses more time to reduce greenhouse gas emissions. The reforms, announced by the European Commission, would slow the annual reduction rate of emissions allowances under the EU's Emissions Trading System (ETS).
Under the current system, the cap on emissions is reduced by 4.3% each year. The new proposal would lower this to 3.7% from 2031 and further to 1.7% from 2036. Additionally, some industries would be able to obtain free emission allowances until 2038 instead of 2034, provided they commit to investing in decarbonisation.
EU Climate Commissioner Wopke Hoekstra described the approach as 'more business-friendly and savvy.' The Commission stated that the changes align with the EU's goal to cut carbon emissions by 90% by 2040, compared to 1990 levels.
The ETS, introduced in 2005, requires power plants and industrial facilities to purchase permits for each tonne of carbon dioxide they emit. This creates a financial incentive to adopt cleaner technologies. However, the system has faced criticism from member states like Italy, which views it as a de facto tax that keeps energy prices high.
The proposal also includes continuing free permits for certain sectors until 2038, rather than phasing them out in 2034. Companies with concrete decarbonisation plans would receive 80% of free permits upfront, with the remaining 20% granted after investments are made.
Polish Climate Minister Paulina Hennig-Kloska welcomed the softening stance, calling it 'a huge success for Poland' and indicating she would push for further weakening. In contrast, German Green MEP Michael Bloss condemned the plans, warning they would lead to 'gigantic climate pollution' and worsen the quality of life for future generations.
The proposals require approval from EU member states and the European Parliament, a process that may take up to a year.
