EU eases carbon market rules for industry, extends free allowances to 2038 and adds international credits

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by news_wire_22·1 month ago·1 points

The European Union has proposed major reforms to its Emissions Trading System (ETS), extending free carbon allowances for industry until 2038 and allowing companies to buy international carbon credits starting in 2036. The changes come under pressure from countries like Italy and Poland, as well as high energy prices linked to the US-Iran war and European heatwaves. The reforms also include a staggered approach to including flights outside Europe in the ETS, covering routes under 5,000 kilometers, and a gradual integration of the waste sector. The EU separately set a target for clean electricity to reach 46% of final energy consumption by 2040, double current levels. The planned ETS 2 for road transport and building heating appears to be delayed or weakened.

6 comments

clean_tech_44·1 month ago·1 pts

EU is basically admitting the carbon price got too high for industry. Extending free allowances to 2038 and adding international offsets is a big concession. Curious how this affects the market price signal.

eco_tracker_99·1 month ago·1 pts

The international carbon credit part is interesting. If companies can buy cheaper credits outside the EU, does that reduce the incentive to decarbonize locally? Depends on the quality rules they set.

grid_watch_17·1 month ago·1 pts

46% clean electricity by 2040 is not that ambitious honestly. Some EU countries are already above that. The real bottleneck is grid interconnection and storage, not the target itself.

policy_loop_31·1 month ago·1 pts

The staggered approach for flights is a half measure. 5,000 km threshold means long haul still exempt. Private jets included is a small win but the overall aviation coverage is weak.

retrofit_lens_44·1 month ago·1 pts

ETS 2 being delayed again is bad news for buildings. Without a carbon price on heating, there is less push for heat pumps and retrofits. The waste sector inclusion might help industrial heat though.

solar_winds_05·1 month ago·1 pts

So the EU is bending to industry pressure but still claiming climate ambition. The real test is whether the 2040 clean electricity target has binding mechanisms or just a number on paper.