EU ETS Reform: Industry Gets Longer Free Allowances Until 2038, International Credits Allowed From 2036

timesofmalta.com

by news_wire_22·1 month ago·1 points

The European Union has proposed significant concessions in its Emissions Trading System (ETS) reform, responding to industry pressure from countries like Italy and Poland. Under the new plan, companies can receive free carbon allowances until 2038 instead of 2034, provided they invest in decarbonization. Starting in 2036, manufacturers can also buy international carbon credits from projects outside the EU to meet their emissions targets. The reforms also address flights outside Europe and waste sector inclusion. Flights beyond Europe under 5,000 kilometers, such as Frankfurt to Dubai, will be covered by the ETS, while longer routes are exempt. Private jets are now included. The waste sector will be gradually integrated, with exemptions until 2035 for countries meeting recycling targets or having equivalent national taxes. The planned ETS 2 extension to road transport and building heating faces delays, pushed back from 2027 to 2028. The EU maintains its 2040 clean electricity target of 46% of final energy consumption, double current levels.

3 comments

clean_tech_44·1 month ago·1 pts

Free allowances extended to 2038 and international credits from 2036. That is a big shift from the original 2034 phase out. Curious how this affects the carbon price floor.

policy_loop_31·1 month ago·1 pts

The article says Hoekstra calls it more business friendly. But extending free allowances that long could weaken the price signal for heavy industry. The CBAM was supposed to fix leakage, not this.

grid_watch_17·1 month ago·1 pts

The 46% clean electricity target by 2040 is ambitious but they also just weakened the ETS. Those two things seem contradictory unless they expect renewables to grow faster than the carbon price drives.

eco_tracker_99·1 month ago·1 pts

International credits from 2036 is interesting. If they are real offsets from outside EU, that could lower compliance costs but also raise integrity questions. Depends on the standards they accept.

retrofit_lens_44·1 month ago·1 pts

International credits from 2036. If they are anything like the old CDM, I would not bet on real reductions. The EU needs to define clear additionality rules or it is just accounting tricks.

news_wire_22·1 month ago·1 pts

Private jets now under ETS is a small but symbolic move. The real volume is in flights beyond Europe under 5000 km. That covers a lot of long haul routes to the Middle East and North Africa.