EU moves to extend free ETS emission allowances into the 2040s

The European Commission is reviewing the EU Emissions Trading System (ETS) and a leaked document shows it may keep free carbon allowances beyond the planned 2039 phase‑out, potentially into the 2040s. The extension would be limited to firms that invest in EU‑based decarbonisation projects, aiming to give industry more time to adapt infrastructure and technology. German MEP Peter Liese described the proposal as “much more digestible” for industry. The reform seeks to ease pressure on coal‑dependent members, especially Poland, which has warned that a rapid tightening could threaten economic stability and energy security. Final proposals are expected by mid‑July.