UN 
Monday commuters in Brussels this morning may not have noticed, but a major policy shift is underway as the European Commission’s revised Emissions Trading System (ETS) comes into sharper focus. The Commission’s latest proposal, unveiled in early July, aims to accelerate decarbonisation by tightening the cap on carbon allowances and expanding the sectors covered under the EU carbon market.
Under the current revision, the EU intends to reduce its total greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. The Commission’s latest data shows that emissions within the ETS fell by 15% over the past two years, but officials now warn that faster reductions are needed. The new review proposes a steeper annual reduction of emissions allowances, with the number of tradable permits set to fall by 4.3% each year starting this summer—up from the previous 2.2% annual cut.
The changes also bring shipping and, for the first time, heavy industry sectors fully into the market. Industry groups from Rotterdam to Marseille are watching closely, as the inclusion of maritime transport could add over 130 million tonnes of CO2 to the regulated market in 2026. Meanwhile, the Carbon Border Adjustment Mechanism (CBAM) is now being trialed at select customs points, aiming to prevent carbon leakage as Europe tightens its climate rules.
Despite strong rhetoric from the Commission, civil society organisations and climate analysts remain cautious. While the reforms are ambitious on paper, the actual delivery will depend on the speed and effectiveness of national implementation. The European Environmental Bureau has already flagged risks of greenwashing, pointing to loopholes in free allowance allocations and slow progress on phasing out subsidies for high-emitting industries.
The coming weeks will see technical negotiations between EU member states and the European Parliament. With energy prices fluctuating and a record heatwave gripping southern Europe, the stakes for tangible, near-term emissions reductions have rarely felt more immediate.
Frequently Asked Questions
What is changing in the EU Emissions Trading System (ETS) in 2026?
Starting in summer 2026, the annual reduction in tradable carbon allowances will increase from 2.2% to 4.3%, and shipping and heavy industry sectors will be fully included in the ETS.
What is the EU’s emissions reduction target for 2030?
The EU aims to reduce greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels.
How much have emissions within the EU ETS fallen recently?
Emissions within the ETS fell by 15% over the past two years.
What is the Carbon Border Adjustment Mechanism (CBAM) and what is its current status?
The CBAM is being trialed at select EU customs points to prevent carbon leakage as Europe tightens its climate rules.
What concerns have been raised about the effectiveness of the ETS reforms?
Civil society organisations and climate analysts are concerned about loopholes in free allowance allocations and slow progress on phasing out subsidies for high-emitting industries.
