The Irish presidency of the EU Council has proposed slowing the phase-out of free carbon permits for industry under the EU Emissions Trading System. The change would give energy-intensive sectors more time before they have to buy allowances at auction. The proposal matters because free allowances are the main way the ETS tries to protect heavy industry from carbon leakage. Slowing the cuts keeps some of that shield in place, but it also weakens the price incentive to cut emissions in sectors like steel, cement, and chemicals. For carbon market watchers, the key question is how this interacts with the CBAM and whether the final legislation still meets the EU's 2030 emissions reduction target. The phase-out schedule will determine whether this is a modest delay or a significant dilution.
