The European Commission has released its proposal to revise the EU Emissions Trading System (EU ETS) for the period after 2030. The plan includes a slower decline in emission allowances, new flexibilities for carbon removals and international credits, and extended free allowances for industries. It also creates a new Industrial Decarbonisation Bank to fund transformation projects. E3G analysts warn the proposal sends mixed signals. While it strengthens support for industrial investment with conditional free allocation and a binding floor for national revenue spending, it also weakens parts of the framework that drive a credible carbon price. Critics say this could increase long-term costs and delay the EU's growth strategy. The upcoming negotiations in Parliament and Council will determine whether the ETS can maintain its role as a central tool for Europe's industrial transformation.
