EU leaders failed to agree on fundamental changes to the Emissions Trading System at the October European Council. After overnight talks, they kept ETS2 on schedule, rejecting another postponement, while agreeing to let the European Commission review the system's impacts. The compromise also extends the Temporary Framework for State Aid for energy intensive industries and calls for voluntary demand pooling and refinery efficiency measures. Member states remain split. Italy, Greece, Cyprus, and the Visegrad countries argue the carbon market is too costly and socially risky. Denmark, Sweden, and Finland, which have already invested in the transition, defend the system. The outcome is a delay on structural reform, not an end to the argument. The Commission review will be the next flashpoint.
