The European Commission has proposed an overhaul of the EU's emissions trading system (ETS), widely regarded as Europe's most effective policy for cutting greenhouse gases, prompting criticism that the changes would water down its impact. The revised plan would give heavy industries a less demanding and cheaper path to emissions cuts, coming just as western Europe endures record-breaking heat and deadly wildfires in Spain that scientists say were made virtually impossible without climate change.

Under the proposals, some heavy industries would keep free pollution permits for longer and see the overall supply of permits reduced more slowly, easing pressure on companies after ten EU member states warned the scheme was pushing up energy costs and hurting competitiveness. The ETS, in place since 2005, is credited with cutting emissions by 47% by 2023 compared with 2005 levels, and the commission says it needs updating to meet the EU's target of a 90% reduction by 2040. The overhaul would also extend the scheme to municipal waste, to flights within 5,000km of Europe (affecting routes to north Africa and the Middle East but not the US or China), and to private jets for the first time. Climate commissioner Wopke Hoekstra defended the ETS as "a phenomenal asset" but said European industries needed protection from foreign rivals benefiting from state subsidies and weaker labour standards.