EU carbon market reform: ETS overhaul details and industry impact

The European Union is set to announce reforms to its Emissions Trading System (ETS), the carbon market that forces heavy polluters to pay for their greenhouse gas emissions. The overhaul comes amid pressure from countries like Italy, Poland, and the Czech Republic for more flexibility, while advocates push to keep the bloc's climate goals on track. Key changes may include slower phaseouts of free allowances for industry, possibly extending them beyond 2034 if companies commit to long term decarbonisation. The EU also faces decisions on expanding the ETS to cover waste and international flights, and on allowing carbon capture or external carbon credits to count toward emissions reductions. Separately, the bloc will set a 2040 target for clean electricity. The reforms are a political flashpoint, pitting carbon-intensive economies against defenders of the system like Spain and Scandinavia, and will shape how the EU balances industry competitiveness with its climate ambitions.