The 3 letters Brussels won’t be able to shut up about

illuminem summarises for you the essential news of the day, reviewed by our editorial team. Read the full piece on POLITICO or enjoy below:

🗞️ Driving the news: The European Commission is preparing a major reform of the EU Emissions Trading System (ETS), the bloc’s flagship carbon pricing mechanism
• The proposal will determine how Europe balances industrial competitiveness, emissions reductions and investment certainty as it moves toward net zero

🔭 The context: The ETS covers around half of EU emissions from major polluters including power plants, factories, aviation and shipping
• Companies must buy carbon allowances for their emissions, creating a financial incentive to reduce pollution. Since its launch in 2005, the system has helped cut EU emissions by around 1 billion tonnes of CO₂

🌍 Why it matters for the planet: The ETS is one of the world’s largest carbon markets and a central pillar of Europe’s climate strategy
• Its reform will influence whether heavy industry accelerates decarbonisation or receives additional flexibility through measures such as extended free allowances, carbon removals or changes to the emissions cap

⏭️ What’s next:The Commission’s proposal will likely trigger months of negotiations between governments, lawmakers, industries and climate groups
• Key debates would focus on the pace of emissions reductions, the future of free carbon allowances, carbon credits, and how ETS revenues are used to support the transition

💬 One quote: “The outcome will determine the path forward for Europe’s heavy industry, shaping decades of investments, and for the bloc’s efforts to cut planet-warming pollution.”

📈 One stat: The EU ETS has generated €265 billion in revenues from carbon allowance auctions since 2013

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