The European Commission has proposed slowing the pace of carbon emission reductions under the EU Emissions Trading System (ETS). The plan would reduce the annual cap decrease rate from 4.3% to 3.7% starting in 2031, and further to 1.7% from 2036. Free emission allowances for some industries would continue until 2038 instead of ending in 2034, provided companies commit to decarbonization investments. The ETS is the EU's main carbon pricing tool, requiring power plants and industrial facilities to buy permits for each tonne of CO2 emitted. The proposed changes aim to align with the EU's 2040 target of 90% emission reductions compared to 1990 levels. Critics argue the slowdown weakens climate ambition, while supporters say it gives businesses more time to transition without harming competitiveness. The proposals still require approval from EU member states and the European Parliament, a process expected to take about a year. Poland has indicated it will push for even weaker rules, while Green lawmakers have condemned the plan as insufficient.
