EU Commission approves carbon market emissions until 2040s

The European Commission announced that it will permit EU industries to continue emitting greenhouse gases well into the 2040s, a decision that follows the Commission’s review of the EU Emissions Trading System (ETS). The ruling comes as the bloc works to balance its 2030 climate target of a 55 % reduction in emissions relative to 1990 levels with the practical realities of industrial production. While the Commission has reaffirmed its commitment to the EU Green Deal and the 2050 net‑zero goal, the new allowance framework will extend the period during which high‑carbon sectors can operate under the current cap‑and‑trade scheme.

Under the revised ETS, companies will receive or purchase emissions allowances that cover the volume of CO₂ they emit. The Commission’s latest guidance expands the window for these allowances, effectively delaying the tightening of the cap that would otherwise force a faster transition to low‑carbon technologies. The decision is intended to provide a smoother transition for heavy‑industry sectors such as steel, cement, and chemicals, which are critical to the EU economy but also among the most difficult to decarbonise.

The move has drawn scrutiny from environmental groups that argue it could undermine the EU’s climate ambitions. Industry representatives, meanwhile, say the extended allowance period will give them time to invest in cleaner technologies and adjust supply chains. The Commission has indicated that the policy will be reviewed regularly, with the expectation that further reductions in emissions will be phased in as technology and market conditions evolve.