The EU might weaken its landmark climate law — the ‘most impactful’ in the world
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- European Commission proposed slowing the EU Emissions Trading System's emissions cuts from 4.4% annually until 2039 to 3.7% annually between 2031-2035 and just 1.7% thereafter.
- The revised schedule would let ETS-covered companies emit roughly 2 billion metric tons more carbon than the prior plan, against a global remaining budget of 80 billion metric tons for a two-thirds chance of limiting warming to 1.5°C.
- The ETS covers about 10,000 EU oil refineries, power stations, and industrial companies representing 40% of the bloc's total climate pollution, and has helped cut EU industrial carbon emissions by roughly 50% since 2005.
- Wijnand Stoefs of Carbon Market Watch warned the proposal gives industrial lobbyists 'a belt of ammunition' to push for weaker cap-and-trade rules in California, South Korea, and other jurisdictions.
- The Commission also proposed continuing free emissions allowances to certain companies, a practice critics say has enriched polluters like ArcelorMittal and BASF, which lobbied heavily for more free permits.
- The proposal must still be negotiated with the Council of the EU and European Parliament, where some environment ministers have vowed to 'fight tooth and nail' against a weakened ETS; final rules are expected by early next year.
Why it matters: The ETS covers 40% of EU emissions and is widely cited as the world's most impactful carbon market; the Commission's plan to add 2 billion tons of allowed pollution to its timeline gives major-polluter lobbies a template to demand slower cuts and more free allowances in California's, South Korea's, and other cap-and-trade systems that have historically looked to Brussels for the ambition benchmark.
