The European People's Party, the largest group in the European Parliament, is pushing to ease the EU's carbon market rules for industry. A draft paper seen by Reuters proposes slowing the annual emissions reduction rate under the Emissions Trading System from 2031 onward and extending free pollution permits for longer than currently planned. The group argues that adjustments are needed to safeguard industrial competitiveness, especially if other measures like the carbon border adjustment mechanism fail to protect EU producers from cheaper imports. If adopted, these changes would reduce the pressure on heavy industry to decarbonize quickly, but they could also weaken the EU's carbon price signal and slow investment in low-carbon technologies. The ETS has generated over 260 billion euros since 2013, and the draft also calls for governments to invest more of that revenue in decarbonizing industries that bear carbon costs. The final rules will be negotiated between the European Parliament and EU member states.
