The European Commission has presented updated benchmarks for the European Union’s Emissions Trading System (EU ETS), which will apply from 2026 to 2030. These will be put out for public consultation and discussed with member states before being adopted.
The official launch of this discussion was announced on the European Commission’s website.
Why it matters
Updating the benchmarks is a key step in determining the volume of free emission allowances that European industry will receive. According to the guidelines proposed by the European Commission, companies will be able to cover approximately 75% of their emissions using these allowances.
Under the current EU ETS system, free allowances are allocated based on the efficiency of companies in each sector. The benchmark is the performance of the top 10% of the most efficient producers. Companies that exceed the established benchmark levels must purchase additional emission allowances.
“The ETS thresholds reward the most efficient facilities and ensure that the free allocation of allowances serves as a powerful incentive for industries leading the transition,” the European Commission explains.
The revision of the performance benchmarks for the 2026–2030 period complements the proposed amendment to the ETS market stability reserve, presented on April 1. These changes are intended to strengthen the stability and predictability of the EU carbon emissions market, which industry has been calling for.
What officials are proposing
The Commission stated that it used “all available legislative flexibility” to address industry concerns regarding rising costs. To encourage the electrification of production, officials retained compensation for indirect emissions from electricity consumption in 14 sectoral benchmarks under the updated approach. The financial impact of this decision is estimated at approximately €4 billion over the 2026–2030 period.
“Together, these measures will help support the competitiveness and decarbonization of EU industry while strengthening the stability and predictability of the European carbon market,” the European Commission noted.
EU executive officials also noted that they plan to conduct a major review of the EU ETS by July 2026 to adapt the system to new economic and climate challenges.
In addition, European Commission President Ursula von der Leyen announced in March 2026 the launch of the ETS Investment Booster with a budget of €30 billion. It will be funded through 400 million EU ETS allowances, and the funds will be directed toward industrial decarbonization projects.
As EcoPolitic reported earlier, the European Commission found a loophole to increase the number of free allowances within the EU ETS.
We explained why heated debates surrounding the European emissions trading system flared up this year in our in-depth analytical piece.
