EU lawmakers debate reforms to Emissions Trading System

European Union policymakers are debating significant adjustments to the Emissions Trading System (ETS). Bruno Tobback, a Member of the European Parliament for the Socialists and Democrats (S&D), has proposed increasing the annual Linear Reduction Factor (LRF) and removing a fallback mechanism that allows for the use of international carbon credits.

In Italy, members of the European Parliament from the Partito Democratico (PD) are calling for the continuation of the ETS, criticizing the Meloni government's stance. The PD MEPs highlighted that recent revisions to the system introduce more flexibility for 2040 climate goals, with a linear reduction factor of 3.7 percent between 2031 and 2035, followed by 1.7 percent between 2036 and 2040.

Discussions also involve the reform of the Market Stability Reserve to manage carbon price volatility and the implementation of the Carbon Border Adjustment Mechanism (CBAM) to protect European industries from unfair competition from third countries.