The European Commission's upcoming review of the EU Emissions Trading System (ETS) will extend free emissions allowances for heavy industry, but will require companies to invest those savings locally to keep them. An internal document seen by Reuters outlines the trade-off: industries get continued free permits to stay competitive against foreign rivals, but must spend on decarbonization within the bloc. The review, due July 15, also mandates that national governments spend more ETS revenue on industrial decarbonization. It will expand the ETS to cover the EU's share of international aviation emissions and may gradually include waste incinerators. A special reserve that controls allowance supply will be redesigned to prevent price volatility. The document maintains existing funds for low-carbon innovation and revenue sharing with poorer EU member states.
