Key facts
- The EPP is advocating for more free pollution allowances for heavy industry under the EU ETS beyond 2030.
- The European Commission's review of the ETS rules has been delayed by two days to July 17.
- The proposed reforms include a slower reduction in the ETS supply cap and an extension of free allocations for industry.
- Some European steelmakers are lobbying against weakening the ETS, citing concerns about investment certainty.
- A poll indicates 72% of European adults support the 'polluter pays' principle.
The European People's Party (EPP) is advocating for significant adjustments to the European Union's Emissions Trading System (ETS), proposing an increase in free pollution allowances for heavy industry beyond 2030. This push comes ahead of a crucial European Commission proposal to revise the ETS rules, which has been delayed by two days to July 17.
The EPP argues that protecting Europe's manufacturing base is as vital as reducing emissions and suggests lowering the Linear Reduction Factor and extending free allocations for sectors facing international competition. While the party supports current free allowance proposals for 2026-2030, they seek to go further, with EPP President Manfred Weber stating the EU cannot "kill its industry due to climate change."
However, the proposed changes face opposition from several European steelmakers, including ArcelorMittal, thyssenkrupp, and voestalpine, who are lobbying to maintain the ETS's integrity. They argue that weakening the system would undermine investment certainty and penalize early adopters of green technologies. Watchdog SteelWatch notes that significant free allowances received have not been matched by comparable investments in decarbonisation.
Conversely, a poll commissioned by Beyond Fossil Fuels indicates broad public support for the "polluter pays" principle, with 72% of European adults believing companies failing to reduce emissions should pay more. Environmental advocates argue that continuing to grant free allowances without stringent conditions will not prevent industrial decline.