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Europe’s carbon market must cut emissions without cutting industrial production. In some industries, emissions have fallen alongside output and plant closures. The EU ETS revision should ensure that progress towards 2050 comes from investment and technology, not deindustrialisation.
The Linear Reduction Factor should be adjusted after 2030 so allowances remain available through 2050. ETS revenues should support decarbonisation projects, while free allocation should continue where alternatives are not available at scale.
For aviation and maritime transport, EU rules should align with international frameworks. Data centres should be removed from the scope where emissions come mainly from backup generators. These changes would link emissions reductions to investment while limiting the relocation of production outside Europe.
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