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October 25, 2026

Newsletter

The European Post

Policy • Diplomacy • strategic insight

LATEST
Hungarian Revolution Anniversary Draws Costa To Budapest ParliamentRecycling Claims On Plastic Bottles Face Tighter EU ScrutinyCommission Scraps Solar Glass Duties On Chinese Imports After 12 YearsCommon Fisheries Policy Reform Splits Fishers And Eco GroupsCosta Opens Bilateral Talks On EU Own Resources Before SummitEU-Türkiye High-Level Meeting Aims to Reboot Cyprus TalksStrait of Hormuz Diplomacy Finds Istanbul Before It Finds BrusselsFrozen EU Funds for Hungary Thaw After Magyar ReformsQuality Jobs Act Narrows to One Text as Ministers Weigh InRule of Law in Malta Under Pressure as Debate Splits MEPsNovember EU-UK Summit Tests An Emissions Trading Link And Youth DealGlobal Europe Budget Fight Opens As MEPs Add 25 Billion EurosRoadworthiness Package Talks Leave Odometer Rules To DecemberHired Vehicles Directive Delay Sends Bulgaria To CourtTax Information Exchange Penalties Too Low In Five StatesState Liability Row Returns Spain To Luxembourg JudgesSpace Threat Response Architecture Widens To Cover Member StatesExtended Producer Responsibility Eases For Small Packaging FirmsBrussels Tests A South Caucasus Peace Package Built On ConnectivityEU-China Trade Talks Yield Rare Earth Licences And A Hybrid Car DealHungarian Revolution Anniversary Draws Costa To Budapest ParliamentRecycling Claims On Plastic Bottles Face Tighter EU ScrutinyCommission Scraps Solar Glass Duties On Chinese Imports After 12 YearsCommon Fisheries Policy Reform Splits Fishers And Eco GroupsCosta Opens Bilateral Talks On EU Own Resources Before SummitEU-Türkiye High-Level Meeting Aims to Reboot Cyprus TalksStrait of Hormuz Diplomacy Finds Istanbul Before It Finds BrusselsFrozen EU Funds for Hungary Thaw After Magyar ReformsQuality Jobs Act Narrows to One Text as Ministers Weigh InRule of Law in Malta Under Pressure as Debate Splits MEPsNovember EU-UK Summit Tests An Emissions Trading Link And Youth DealGlobal Europe Budget Fight Opens As MEPs Add 25 Billion EurosRoadworthiness Package Talks Leave Odometer Rules To DecemberHired Vehicles Directive Delay Sends Bulgaria To CourtTax Information Exchange Penalties Too Low In Five StatesState Liability Row Returns Spain To Luxembourg JudgesSpace Threat Response Architecture Widens To Cover Member StatesExtended Producer Responsibility Eases For Small Packaging FirmsBrussels Tests A South Caucasus Peace Package Built On ConnectivityEU-China Trade Talks Yield Rare Earth Licences And A Hybrid Car Deal

ETS Free Allowances Near 100 Million Under Committee Mandate

Atli Samper
Policy Watch Editor, Energy and Climate

Brussels: Industry could receive close to 100 million extra ETS free allowances under the negotiating mandate that Parliament’s Environment Committee adopted on 19 October. The committee voted 64 to 11 with 2 abstentions, and Adam Jarubas, an EPP member from Poland, leads the file. The mandate covers the heat and fuel benchmarks that set free carbon allowances for 2026 to 2030.

Those benchmarks apply to installations without a product-specific benchmark. They decide how many ETS free allowances a factory gets to guard against carbon leakage, the relocation of production to countries with weaker climate rules. The Commission proposed the revision in July.

The committee wants to use all allowances still available for free allocation, estimated at about 88 million. It adds roughly 11 million withheld from installations that failed to meet ETS conditions, such as carrying out energy audit recommendations. Together that brings the pool of ETS free allowances to nearly 100 million. Reference values would fall by an average of about 12.5 percent compared with 2021 to 2025.

Allowances that go unallocated would be split. One third would flow to the Modernisation Fund, which helps modernise district heating, and one third to the Innovation Fund for low-emission technologies. The remainder would adjust the benchmarks. Jarubas said the committee recognises that “certain sectors need stronger protection against carbon leakage.”

Ceramics sit at the heart of the debate over ETS free allowances. Members asked the Commission to create sector-specific sub-benchmarks where installations differ widely, based on the 10 percent most efficient plants, with refractory products and ceramic tiles first in line. A Parliament spokesperson stressed that the sub-benchmarks are not new fallback benchmarks. The Commission would set the criteria in a delegated act, with final values to follow in implementing acts.

Reactions split along familiar lines. The Social Democrats, Liberals, Conservatives and the EPP backed the mandate, and Annalisa Corrado of the Italian Democratic Party called it a very important political result. Italian conservatives said the text is a first step compared with a Commission proposal they found unsatisfactory.

The timing is tight. Talks with the Council follow the mandate, with the aim of applying the new values from the 2027 update, while EU leaders target a final political agreement on the wider ETS review by the first quarter of 2027. Industry and carbon market participants doubt that date is realistic, and high gas prices raise the stakes for tile makers. How many ETS free allowances survive the negotiation will decide how much protection those producers actually get.

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