The European Commission will publish its review of the EU Emissions Trading System (ETS) on Friday, proposing a slower reduction of carbon allowances that would let heavy industry keep emitting well into the 2040s.

The plan would adjust the linear reduction factor from 4.4 per cent to a range of 3.5‑3.9 per cent from 2031 to 2035, then to about 2.2 per cent after 2036, while keeping the bloc on track for its 2050 net‑zero goal. The scheme currently raises about €40bn annually.

Heavily polluting sectors such as steel, cement and refineries, along with fossil‑fuel‑dependent states like Italy and Poland, have lobbied for the looser cap, arguing high carbon costs hurt competitiveness. Climate‑leading nations including Sweden, Spain and the Nordic group warned that easing the ETS would shift the burden to other sectors.

Since its launch in 2005, ETS‑covered emissions have fallen 46.8 per cent, mainly from power generation switching to renewables, while industrial sectors have lagged in decarbonisation, according to think‑tank Bruegel.