The European People's Party, the largest group in the European Parliament, is pushing to weaken the EU Emissions Trading System to protect industrial competitiveness. A draft internal paper seen by Reuters proposes slowing the annual emissions reduction rate under the ETS by at least one percentage point from 2031 to 2035, and extending free carbon permits for industry. The group also wants governments to invest more ETS revenue in decarbonizing industrial sectors that bear carbon costs. The draft signals growing political pressure to soften the EU's carbon market as industries struggle with high energy costs and global competition. The European Commission is due to propose ETS changes on July 17, and the EPP's position will shape negotiations between the Parliament and member states. Critics argue that slowing the ETS trajectory could undermine the EU's climate targets, while supporters say it is necessary to prevent deindustrialization and carbon leakage.
