BRUSSELS — The European Commission has proposed amending its cap-and-trade system to boost the supply of pollution permits and shield industry from soaring carbon costs, in the first of a string of changes to the EU’s most important climate policy.
The EU’s Emissions Trading System, which requires companies to pay for their pollution by purchasing permits, has come under increasing pressure from heavy industry in recent months, who say it is adding extra expense on top of already sky-high energy costs. EU ETS permits currently trade at around €75 per ton of carbon dioxide.
Some national governments have joined industry in pushing Brussels to make urgent changes to the law, ranging from increasing the number of free permits handed out to scrapping the scheme altogether.
The measure announced Wednesday is a modest prelude to potentially much more sweeping changes to the ETS later this year. It will amend an existing mechanism called the Market Stability Reserve, which puts a cap on the number of permits in circulation at any one time. It acts much the same way as oil reserves, which can be used to regulate the price of a barrel of crude.
