Europe has approved a revision of the emissions trading system in 2023. However, these improvements are not yet enough. Europe can improve the new system by:

• Restrict the free giving away of emission allowances even further and faster. Especially now that the proposal also includes a carbon tax at the border, it is no longer necessary to protect European companies against competition from outside the EU.
• Better define the concept of 'climate action', for example by linking it to the 'do no significant harm' principle and existing definitions of real green investments. In this way we prevent proceeds from the emissions trading system from being misused.
• Make the reduction target more ambitious, and tighten the mechanisms that can ensure this (such as the MSR and the benchmarks for free allowances).