On Friday, July 17th, 2026, the European Union unveiled proposals to slow the pace of greenhouse gas emissions cuts for businesses under its emissions trading system (ETS). Introduced in 2005, the ETS is the EU's primary mechanism for reducing carbon emissions.

The proposed reforms would allow some industries to obtain emission allowances until 2038 instead of 2034, contingent on their commitment to invest in decarbonisation efforts. Additionally, the European Commission has suggested reducing the annual rate at which the emissions cap is lowered—from the current 4.3% to around 3.7% starting in 2031, and further down to 1.7% from 2036.

These changes are intended to align the ETS with the EU's goal of cutting carbon emissions by 90% by 2040 compared to 1990 levels. However, the proposals still require approval from EU member countries and lawmakers, a process expected to take up to a year.

EU Climate Commissioner Wopke Hoekstra described the approach as "more business-friendly and, may I say so, savvy." In contrast, German MEP Michael Bloss criticized the plans, warning they would cause "gigantic climate pollution" and degrade the quality of life for future generations.

Poland's climate minister, Paulina Hennig-Kloska, welcomed the softening of the policy stance as a "huge success for Poland" and indicated that the country would push for further weakening of the rules.

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