Europe's emissions trading system (ETS) has cut emissions from stationary industrial sites by 51% since 2005, but industry groups now want to weaken the next revision. Free allowances still cover roughly 90% of industrial emissions, and sectors like aviation continue to rise. The European Commission's upcoming proposal will determine whether the carbon market stays on track for 2050 carbon neutrality or gets delayed. Countries like Turkey, India, and Indonesia are launching their own ETS partly due to the EU's Carbon Border Adjustment Mechanism. Yet early flaws like free permits and offsetting are being copied. The battle in Brussels centers on the phase-out timeline for free allowances and the annual emissions cap reduction rate, which is currently 4.3%.
