The European Union has proposed a reduction in carbon emissions for businesses

The European Union has unveiled proposals to help businesses reduce their greenhouse gas emissions as part of a major climate policy overhaul.

The amendment relaxes the EU’s Emissions Trading System (ETS) rules to allow businesses to reduce their carbon footprint more than previously planned.

The changes mean some industries could receive emissions allowances until 2038 instead of 2034, if they decide to invest in decarbonisation efforts.

The proposals still need to be approved by EU countries and lawmakers – a process that could take a year.

“We are taking a business-friendly and, shall I say, sensible approach,” said EU Climate Commissioner Wopke Hoekstra.

The EU, which legislated for the 27 member states, says the change ensures the ETS is in line with the EU’s target of reducing carbon emissions by 90% compared to 1990 levels.

In the year Introduced in 2005, the ETS is the EU’s main instrument for reducing greenhouse gas emissions.

But it is facing criticism from several member states, especially Italy, who have condemned the trade plan as a virtual tax that has artificially increased energy prices.

Under the ETS, European industries and power plants are required to buy permits or allowances for every ton of carbon dioxide they emit, creating a financial incentive to invest in cleaner technologies.

Companies can buy or trade additional licenses. Some businesses are given free licenses to help them compete with foreign companies that don’t pay carbon costs.

ETS caps the number of permits issued each year to ensure emissions are reduced.

The European Commission proposes to reduce the rate at which this cap will be reduced each year to 3.7% from 2031 and to 1.7% from 2036 – down from the current 4.3%.

As part of the changes, the EU proposed to continue with carbon border payments on imports for some sectors until 2038 instead of ending exemptions in 2034.

In addition, the Commission offers 80% exemptions to companies planning to invest in decarbonisation in Europe first. Businesses get the remaining 20% ​​after those investments are made.

Responding to the proposals, Poland’s climate minister, Paulina Hennig-Kloska, said Poland would push for further weakening of the policy.

“For the first time, we are seeing a softening of the position instead of hardening – this is a great success for Poland. Although we will fight for more,” she said.

Green politicians, however, were less impressed. German Michael Bloss, a member of the European Parliament, said the plans would lead to “huge climate pollution” and that future generations would have a worse quality of life as a result.