Council agrees position to raise free ETS allowances for selected sectors through 2030
Published · Updated
What happened
The Council adopted a position on a targeted ETS measure that would grant additional free carbon allowances between 2026 and 2030 to sectors covered by heat and fuel ETS benchmarks. The measure changes the balance between auction-based carbon pricing and free allocation for affected industrial sectors.
Why it matters
The Council position gives member states a common line on a live ETS file and can shape near-term trilogue talks, compliance planning, and expectations for carbon-cost exposure in affected industries. It also signals how far governments are willing to adjust carbon-pricing rules when competitiveness and carbon-leakage concerns intensify.
On 2026-09-17, the Council agreed its negotiating position on a targeted change to the EU Emissions Trading System that would increase free allowances from 2026 to 2030 for sectors covered by heat and fuel ETS benchmarks. The stated aim is to limit carbon-leakage risk for exposed industries as EU institutions balance decarbonisation incentives with competitiveness concerns. The move now sets up the next institutional phase with the European Parliament and Commission in the legislative process.
Watch for
Council of the EU publication of the full general approach text and compromise wording in the public register by 2026-09-20 European Parliament ENVI committee coordinators' note or rapporteur statement on whether Parliament will harden or narrow free-allocation changes by 2026-09-20 European Commission Climate Action Directorate acknowledgement of trilogue readiness or legal-technical concerns on benchmark coverage by 2026-09-20 ICE Endex or EEX EUA front-year settlement reaction on 2026-09-18 to 2026-09-19 after the Council position becomes tradable information
Sources
- Council of the European Union · consilium.europa.eu
- EURACTIV · euractiv.com
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