{"id":120618,"date":"2026-07-17T13:08:33","date_gmt":"2026-07-17T11:08:33","guid":{"rendered":"https:\/\/eeb.org\/?p=120618"},"modified":"2026-07-17T14:43:39","modified_gmt":"2026-07-17T12:43:39","slug":"commission-caves-to-industrial-laggards-weakening-eu-carbon-market","status":"publish","type":"post","link":"https:\/\/eeb.org\/en\/commission-caves-to-industrial-laggards-weakening-eu-carbon-market\/","title":{"rendered":"Commission caves to industrial laggards, weakening EU carbon market"},"content":{"rendered":"<p><strong>Brussels, 19 July 2026 \u2013 The European Commission today\u00a0<a href=\"https:\/\/ec.europa.eu\/commission\/presscorner\/detail\/en\/qanda_26_1598\" target=\"_blank\" rel=\"noopener\">tabled<\/a>\u00a0its revision of the EU Emissions Trading System (ETS), the cornerstone of Europe\u2019s climate policy that is designed to make polluters pay and drive industrial decarbonisation. Rather than reinforcing this critical investment signal at a time of fossil fuel volatility, the proposal weakens key provisions, rewarding polluters while undermining businesses investing in fossil-free production, the EEB warned.<\/strong><\/p>\n<p><em>The European Environmental Bureau (EEB) is Europe&#8217;s largest network of environmental civil society organisations.\u00a0<\/em><\/p>\n<p>The ETS has cut emissions from covered sectors by around\u00a0<a href=\"https:\/\/climate.ec.europa.eu\/news-other-reads\/news\/eu-emissions-trading-system-has-reduced-emissions-sectors-covered-50-2005-2025-04-04_en\" target=\"_blank\" rel=\"noreferrer noopener\">50%<\/a>\u00a0since its introduction but is only now beginning to drive meaningful industrial transformation.<\/p>\n<p>Today\u2019s proposal risks weakening the very mechanism that is starting to shift markets, introducing new flexibilities that reduce the pressure on high emitters and weaken incentives for industry to move towards cleaner processes.<\/p>\n<p><strong>Duncan Woods,\u00a0<\/strong>Senior Policy Officer for Industrial Decarbonisation, said:<\/p>\n<blockquote><p><em>\u201cThe ETS is not just about making polluters pay. It is Europe\u2019s engine for industrial renewal. At a time when the global race for clean industry is accelerating, weakening the carbon market means weakening Europe\u2019s competitive edge. Instead of backing the companies leading that transition, the Commission has bent over backwards to accommodate industrial laggards that have long used the ETS as a scapegoat for decades of underinvestment. A weaker carbon price penalises investment in fossil-free production and risks locking Europe into 19th-century industrial processes while prolonging our dependence on fossil fuel imports.\u201d\u00a0<\/em><\/p><\/blockquote>\n<p>Among the most concerning changes are:<\/p>\n<ul role=\"list\">\n<li role=\"listitem\" aria-setsize=\"-1\" data-aria-level=\"1\" data-aria-posinset=\"1\" data-font=\"Symbol\" data-leveltext=\"\uf0b7\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559683&quot;:0,&quot;335559684&quot;:-2,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-listid=\"14\"><strong>A weaker emissions cap<\/strong>, with the proposed Linear Reduction Factor (LRF) reduced from the previously envisaged 4.4% to\u00a03.7% for 2031-2035 and just 1.7% for 2036-2040, allowing hundreds of millions of tonnes of additional emissions from ETS sectors.<\/li>\n<\/ul>\n<ul role=\"list\">\n<li role=\"listitem\" aria-setsize=\"-1\" data-aria-level=\"1\" data-aria-posinset=\"2\" data-font=\"Symbol\" data-leveltext=\"\uf0b7\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559683&quot;:0,&quot;335559684&quot;:-2,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-listid=\"14\"><strong>More free allowances for industrial emitters until 2038,<\/strong>\u00a0slowing the phase-in of the Carbon Border Adjustment Mechanism (CBAM), an instrument specifically designed to discourage emission-intensive imports.<\/li>\n<\/ul>\n<ul role=\"list\">\n<li role=\"listitem\" aria-setsize=\"-1\" data-aria-level=\"1\" data-aria-posinset=\"3\" data-font=\"Symbol\" data-leveltext=\"\uf0b7\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559683&quot;:0,&quot;335559684&quot;:-2,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-listid=\"14\"><strong>Weak conditionality for additional free allocation,<\/strong>\u00a0allowing companies to continue receiving a de facto subsidy for emissions without making meaningful investments in industrial decarbonisation.<\/li>\n<\/ul>\n<ul role=\"list\">\n<li role=\"listitem\" aria-setsize=\"-1\" data-aria-level=\"1\" data-aria-posinset=\"4\" data-font=\"Symbol\" data-leveltext=\"\uf0b7\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559683&quot;:0,&quot;335559684&quot;:-2,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-listid=\"14\"><strong>International credits through the backdoor<\/strong>, passing the buck to reduce emissions outside of Europe. These credits for overseas emissions reductions, which often\u00a0<a href=\"https:\/\/eeb.org\/en_gb\/library\/letter-against-international-credits-integration-into-the-eu-2040-climate-target-and-ndc\/\" target=\"_blank\" rel=\"noreferrer noopener\">lack environmental integrity<\/a>, would be \u201cindirectly\u201d integrated into the ETS from 2036 under the Commission\u2019s proposal.<\/li>\n<\/ul>\n<ul role=\"list\">\n<li role=\"listitem\" aria-setsize=\"-1\" data-aria-level=\"1\" data-aria-posinset=\"5\" data-font=\"Symbol\" data-leveltext=\"\uf0b7\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559683&quot;:0,&quot;335559684&quot;:-2,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-listid=\"14\"><strong>Risk of chronic oversupply,\u00a0<\/strong>as well as\u00a0<a href=\"https:\/\/ec.europa.eu\/commission\/presscorner\/detail\/en\/ip_26_666\" target=\"_blank\" rel=\"noreferrer noopener\">scrapping the invalidation clause<\/a>, the Commission has indicated the intake rate of the Market Stability Reserve (MSR) will be slashed from 24% to 12%, reducing the rate at which excess allowances are removed from the market.<\/li>\n<\/ul>\n<p>In the buildup to this proposal, we have seen a clear split between <a href=\"https:\/\/www.outokumpu.com\/en\/news\/2026\/joint-statement-by-european-steel-leaders,-c-,-steel-businesses-for-ets1-and-cbam-3768244\" target=\"_blank\" rel=\"noreferrer noopener\">progressive industry<\/a>\u00a0who are investing in low-carbon solutions and\u00a0<a href=\"https:\/\/www.politico.eu\/article\/steel-and-chemicals-giants-demand-freeze-to-eus-flagship-climate-policy\/\" target=\"_blank\" rel=\"noreferrer noopener\">laggards<\/a>\u00a0who wish to maintain the status quo and avoid climate accountability. Unfortunately, the Commission has bowed to pressure from the latter by weakening the ambition of the ETS in several key areas.<\/p>\n<p>The proposal also creates broader challenges for the EU\u2019s climate targets. Any additional emissions allowed under the ETS will need to be offset by deeper cuts elsewhere in the economy, shifting the burden away from heavy industry and onto sectors that have a more direct impact on households and citizens.<\/p>\n<p>At the same time, the EEB welcomed proposals to broaden the scope of the ETS to include international aviation and waste incineration. Bringing waste incineration into the EU carbon market is a long-overdue step towards cutting emissions from the sector and supporting Europe\u2019s transition towards a circular economy.<\/p>\n<p>The Commission\u2019s proposal will now enter negotiations with the European Parliament and Member States.\u00a0ENDS<\/p>\n<p><strong>Notes to editors\u00a0<\/strong><\/p>\n<ul role=\"list\">\n<li role=\"listitem\" aria-setsize=\"-1\" data-aria-level=\"1\" data-aria-posinset=\"1\" data-font=\"Symbol\" data-leveltext=\"\uf0b7\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559683&quot;:0,&quot;335559684&quot;:-2,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-listid=\"13\"><a href=\"https:\/\/eeb.org\/en\/seven-in-ten-across-europe-say-biggest-polluters-and-climate-laggards-should-pay-more-challenging-rollback-of-eu-ets\/\" target=\"_blank\" rel=\"noreferrer noopener\">72% of Europeans say biggest polluters should pay more, challenging ETS rollback<\/a>.<\/li>\n<\/ul>\n<ul role=\"list\">\n<li role=\"listitem\" aria-setsize=\"-1\" data-aria-level=\"1\" data-aria-posinset=\"2\" data-font=\"Symbol\" data-leveltext=\"\uf0b7\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559683&quot;:0,&quot;335559684&quot;:-2,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-listid=\"13\"><a href=\"https:\/\/eeb.org\/en\/library\/recommendations-for-the-revision-of-the-eu-emissions-trading-system-ets\/\" target=\"_blank\" rel=\"noreferrer noopener\">EEB recommendations for the ETS revision<\/a>.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Brussels, 19 July 2026 \u2013 The European Commission today\u00a0tabled\u00a0its revision of the EU Emissions Trading System (ETS), the cornerstone of Europe\u2019s climate policy that is designed<span class=\"excerpt-hellip\"> [\u2026]<\/span><\/p>\n","protected":false},"author":64,"featured_media":120619,"comment_status":"closed","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,123,132,144],"tags":[149,968,1042,1052,1059,1060],"class_list":["post-120618","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","category-climate-change","category-industrial-emissions","category-homepage","tag-industrial-emissions","tag-carbon-pricing","tag-competitiveness","tag-ets","tag-industrial-transofrmtion","tag-cbam"],"acf":[],"jetpack_featured_media_url":"https:\/\/eeb.org\/wp-content\/uploads\/2026\/07\/META-featured-image-right-size-87.png","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/eeb.org\/en\/wp-json\/wp\/v2\/posts\/120618","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/eeb.org\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/eeb.org\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/eeb.org\/en\/wp-json\/wp\/v2\/users\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/eeb.org\/en\/wp-json\/wp\/v2\/comments?post=120618"}],"version-history":[{"count":0,"href":"https:\/\/eeb.org\/en\/wp-json\/wp\/v2\/posts\/120618\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/eeb.org\/en\/wp-json\/wp\/v2\/media\/120619"}],"wp:attachment":[{"href":"https:\/\/eeb.org\/en\/wp-json\/wp\/v2\/media?parent=120618"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/eeb.org\/en\/wp-json\/wp\/v2\/categories?post=120618"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/eeb.org\/en\/wp-json\/wp\/v2\/tags?post=120618"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}