EU carbon market reform: EPP pushes to extend free pollution allowances for heavy industry beyond 2030

The European People's Party (EPP) is pushing the European Commission to soften upcoming EU carbon market reforms by extending free pollution allowances for heavy industry beyond 2030. The EPP argues that protecting Europe's manufacturing base is as important as cutting emissions, and wants to slow the decline in free allowances under the Emissions Trading System (ETS). The Commission is due to propose revised ETS rules on 15 July 2026. But the move has divided industry. Six major steelmakers including SSAB and Salzgitter are lobbying to keep the ETS strong, saying weakening it would penalise early movers and delay decarbonisation. A SteelWatch report found that three top steelmakers received 25.7 billion euros in free allowances but invested only 3.2 billion in decarbonisation. A YouGov poll across six EU countries shows 72 percent of adults support the polluter pays principle, suggesting the public backs a strong carbon price even as political pressure mounts to soften it.