Peter Liese, the European Parliament’s lead ETS negotiator, has proposed directing 75% of carbon market revenue to industrial decarbonisation, above the European Commission’s proposed 50% share.
Peter Liese, the European Parliament’s lead negotiator on reforms to the EU Emissions Trading System (EU ETS), has proposed that member states allocate 75% of ETS revenues to decarbonising local industries. The European Commission had proposed a 50% share.
The EU ETS requires industries and power plants to buy permits covering their carbon dioxide emissions, and is central to the bloc’s plan to cut greenhouse gas emissions. Rising carbon costs have added pressure on energy-intensive sectors such as steel, cement and chemicals, which have been pushing Brussels for more direct support as the scheme tightens through the 2030s. Liese, a member of the European People’s Party, is seeking changes that give companies more flexibility while keeping the EU’s climate targets intact.
His draft would also change the pace at which the ETS emissions cap declines. Under Liese’s proposal, the cap would fall by 3.4% a year from 2031 and by 2.3% from 2036. The Commission’s proposal envisages a faster 3.7% annual cut from 2031, slowing to 1.7% from 2036. The difference matters for industrial planning, since it shapes how quickly the pool of available permits shrinks, and how steeply compliance costs rise, over the next decade.
“It is possible to adapt a current scheme and give industry more breathing space without endangering the climate targets,” Liese said.
The proposal comes as the European Parliament and EU member states prepare their positions on the wider ETS revision. Formal negotiations between Parliament and the Council are expected to begin in December, once both sides have settled their negotiating mandates. The share of ETS revenue that flows back into industrial decarbonisation, and the trajectory of the emissions cap, are among the most closely watched details for heavy industry, since together they determine both the funding available for cutting emissions and the cost of continuing to emit while doing so.
Liese’s role as the Parliament’s lead negotiator gives his position weight going into the trilogue with the Council and the Commission, though it is not the Parliament’s final word. His proposal still needs to be reconciled with those of other political groups before the Parliament adopts a single negotiating mandate, and then squared with the Council’s own position once member states have agreed theirs. Until that mandate is set, both the 75% revenue share and the slower cap trajectory remain proposals rather than settled policy, but they mark the opening position industrial lobbies will now be working from as the ETS revision heads towards its December negotiations.
For industrial emitters, the outcome will help settle how much support is available to fund the switch to lower-carbon processes over the next ETS phase, at a time when energy-intensive manufacturers are already lobbying for measures to protect their competitiveness against producers outside the EU’s carbon pricing system.
