Speaking after an EU leaders summit where high energy costs sparked by the Middle East war were high on the agenda, von der Leyen said the EU Emissions Trading System (ETS), which Italy and others want to see significantly reformed, was "working" but needed updating.

The European Commission president told an early morning press conference that changes in the works included "a more realistic trajectory" for cutting emissions and the allocation of "free emission allowances" -- currently set to be phased out by 2034 -- "beyond 2035".

Thursday's summit came as Europe weighs how to blunt the impact of the growing energy shock triggered by the Middle East crisis, with the effective closure of the Strait of Hormuz and strikes on key oil and gas sites roiling world markets.

Designed to help tackle climate change, the ETS caps greenhouse?gas emissions and allows companies to trade allowances within that cap, obliging heavy polluters to buy permits.

But critics, including some within European industry, argue that the system contributes to high energy bills, as gas-fired plants need to pay up to cover their planet-warming emissions.

Von der Leyen also said Brussels would help industry's green transition with a 30-billion-euro ($35-billion) "ETS investment booster" financed with revenue from the carbon trading system.

"After weeks of criticism, EU leaders have shifted toward a more reasonable debate on the future of the carbon and electricity markets, acknowledging the importance of investor stability and the role of the CO2 price in driving the modernisation of the economy," commented Neil Makaroff of Strategic Perspectives, a think tank.