EU ETS Revision Faces Criticism: Experts Warn of Allowance Surplus as Commission Extends Timeline

Experts at the Öko-Institut have criticized the European Commission's proposed revision of the EU Emissions Trading System (ETS). The Commission plans to extend the timeline for reducing the supply of allowances to give industry more time to transition, but experts predict this will lead to a surplus of emissions allowances, undermining the carbon price signal. The article details the key points of the proposed revision and the expert critique. A surplus of allowances could lower the cost of emitting CO2, reducing the incentive for industrial decarbonization. This is a critical debate for anyone tracking the effectiveness of the EU's primary carbon pricing mechanism.