EU proposes major carbon market overhaul

The European Commission proposes the largest reform to the European Union Emissions Trading System, aiming to expand its scope to include international flights arriving in Europe from destinations within 5,000 kilometers starting in 2029. The proposals include imposing carbon charges on flights between Europe and countries such as Dubai and Istanbul, with exceptions for flights from places like the United States, China, and long-haul flights such as Tokyo. Consideration is also being given to extending free allowances for industries until 2038, increasing support for decarbonization investments, and allocating more system revenues toward emissions reduction technologies. The goal is to balance climate commitments with enhancing the competitiveness of European industries, despite political challenges and some countries maintaining positions that favor greater policy flexibility.

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