The European Commission has proposed amendments to the European Union Emissions Trading System (EU ETS), extending the phase-out of free carbon allowances for sectors covered under the Carbon Border Adjustment Mechanism (CBAM), including steel, until 2038. Under the previous framework, free allocations were scheduled to be fully phased out by 2034. The proposed revision, announced on 17 July, slows the reduction pace, providing additional transition time for affected industries while making continued access to free allowances conditional on investment in decarbonisation projects within the EU.
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