EU Proposes Sharply Slowing Carbon Market Emission Cuts in Biggest ETS Overhaul Since 2005

The European Commission proposed on 17 July 2026 cutting the annual ETS emissions cap reduction rate from 4.3% to 3.7% from 2031, then to 1.7% from 2036. The EU's main climate tool since 2005, the ETS covers power plants, factories, airlines, and shipping. Climate commissioner Hoekstra called it "more business-friendly." Member states and parliament must still approve the plan, which could take a year.