EU Carbon Market Reform Risks Breaking Political Centre as EPP Eyes Right-Wing Support
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Three major European Parliament groups, the Socialists and Democrats (S&D), Renew Europe and the Greens, are preparing to oppose proposals to relax the EU’s Emissions Trading System (ETS), deepening divisions with the centre-right European People’s Party (EPP).
The dispute centres on how quickly the supply of carbon permits should be reduced. Under the current trajectory, emissions covered by the ETS could reach zero around 2039 or 2040. The European Commission’s proposal, broadly supported by the EPP, would push this target into the 2040s, while the three other groups want faster industrial decarbonisation.
The ETS, which covers sectors including power generation, steel and chemicals, has traditionally enjoyed broad support across mainstream political groups. However, the latest disagreement threatens this cooperation and raises the possibility of the EPP seeking support from right-wing and far-right groups to secure a compromise.
German MEP Peter Liese, leading Parliament’s work on the reform, has expressed a preference for a broad coalition. However, industry-friendly amendments from the European Conservatives and Reformists (ECR) could offer an alternative as divisions grow within the EPP over climate policy.
Far-right support remains uncertain, with some groups seeking to abolish the ETS entirely and others advocating a substantial slowdown in EU climate measures.
