EU ETS revision faces industry pushback and ten‑member opposition

The European Commission will present an overhaul of the EU Emissions Trading System (ETS) on 17 July 2026, aiming to extend the scheme into the 2030s, align it with the bloc’s 2040 target of a 90 % net emissions cut and adjust the annual reduction rate of the emissions cap. The proposal keeps free CO₂ permits for industry until the end of 2037, attaches conditions that 80 % of free permits go to firms with decarbonisation plans, and seeks to direct 50 % of ETS revenue to domestic industry. It also proposes a slower cap‑reduction pace (about 3.7 % from 2031) and a possible expansion to more sectors.

A coalition of ten EU states – Italy, Poland, Bulgaria, Cyprus, the Czech Republic, Estonia, Greece, Hungary, Romania and Slovakia – issued a joint statement urging the Commission to reconsider the new carbon price on heating and transport fuels (ETS2) slated for 2028, to grant more free permits and to avoid raising consumer costs in the current economic and geopolitical climate. German CDU‑Economic Council President Astrid Hamker criticised the planned use of ETS revenues to fill budget gaps, insisting the funds should finance the industrial transformation. Rail‑sector organisations also lobbied for ETS proceeds to be earmarked for rail electrification and other low‑carbon transport investments. The debate pits climate‑policy ambition against concerns over competitiveness and consumer impact across the EU.