The European Parliament's lead ETS negotiator Peter Liese has tabled a proposal requiring EU member states to deploy 75% of revenues from emissions trading system (ETS) allowance sales for the green transition of covered industrial operators, Reuters reported.

The share is higher than the 50% threshold initially put forward by the European Commission.

The proposal aims to ease financial pressure on energy-intensive industries, which have long complained about high CO2 allowance costs and eroding global competitiveness, while supporting domestic manufacturing and power sector decarbonization.

"It is possible to adapt the current system and give industry more room for manoeuvre without jeopardising the achievement of climate targets," said Liese.

The draft also revises the ETS emissions cap reduction trajectory: the annual linear reduction factor would stand at 3.4% from 2031 and fall to 2.3% from 2036. For comparison, the European Commission proposed 3.7% and 1.7% respectively.

The adjusted path grants industry slower emission cuts in the early-2030s, tightening reduction efforts in the second half of the decade, addressing concerns from chemical and other heavy industries over plant viability and global competitiveness risks.

The European Parliament and EU member states are expected to finalize their respective negotiating positions on ETS reform in December, ahead of inter-institutional trilogue talks.