The EU emissions trading system (EU ETS) is the cornerstone of Europe’s climate policy. But the geopolitical and economic situation has changed. Accordingly, the ETS proposals shall be revised to seek greater flexibility and bring relief for the industry, while all ambitions shall be kept. Free CO2 allocations for companies will continue beyond 2030. Member states should reinvest at least 50% in decarbonisation, instead of spending large proportions of the ETS income on other budgets such as defence programs and social welfare. However, according to the chart, remaining carbon budgets are limited and need urgent action (Chart Credit: Global Carbon Project).