Negotiators from the European Parliament, EU Member States and the European Commission reached an agreement overnight on Thursday to Friday on a further step to provide relief for industry under the European Emissions Trading System (EU ETS). As part of a compromise, they agreed to support the European Commission’s proposal to make more free allowances available, while amending the proposal even further in favour of industry. In July, the Commission had proposed making an additional 88 million allowances available. The compromise adds another 33 million allowances. Both the 88 million allowances from the Commission’s proposal and 28 of the additional 33 million will be made available simultaneously in early 2027. The remaining five million allowances will be reserved for sectoral sub-benchmarks and released at the turn of 2027/2028. The additional allowances will not be subject to the discussion on additional conditions (conditionality).
“The compromise is another important step towards supporting energy-intensive industries in difficult times and safeguarding jobs without jeopardising climate protection. Just a few weeks ago, we agreed to reform the so-called Market Stability Reserve and thereby stop the cancellation of allowances. Both measures will have a short-term impact and give companies in the steel, chemical and other industries, which are currently under considerable pressure, some breathing space,” emphasised Dr Peter Liese, climate policy spokesperson for the largest political group in the European Parliament (EPP – Christian Democrats).
Adam Jarubas, EPP Member of the European Parliament, welcomed the agreement as an important step towards strengthening the competitiveness of European industry while supporting its decarbonisation:
“As the EPP, we promised the change in free allocation benchmarks to provide stability to many industrial sectors during the transition, safeguard their competitiveness and support their decarbonisation. And this is what we deliver by strengthening free allocation under the heat and fuel fallback benchmarks for sectors such as ceramics, chemicals, food processing, pulp and paper, and district heating. In the next step, we need to take care of the methodology of product and process benchmarks so that the rest of industry can benefit from more fair free allocation,” stressed Adam Jarubas.
