The European Commission is reviewing the benchmarks for the Emissions Trading System (EU ETS) for the 2026–2028 period. The new benchmarks are tentatively scheduled to be published by May, but this decision has raised concerns in Italy. Italian officials are calling for a freeze on the benchmark revision until the ETS itself is reformed.
This is reported by Politico.
At the same time, the country is asking Brussels to intervene regarding the cross-sectoral adjustment factor. This mechanism was created to ensure that free allowances never exceed the overall emissions cap.
Impact of the review
Benchmark figures serve as the basis for determining the number of free CO2 emission allowances. The benchmark is set by the 10% of companies in a specific sector that produce the lowest emissions.
However, in Italy, revising these benchmarks prior to a comprehensive review of the entire emissions trading system is seen as a threat to industrial sustainability, proportionality, and legislative coherence. A letter signed by the Italian ministers of enterprise and energy security calls for a freeze on the benchmarks at their current levels.
Officials also view such a decision as a basis for future regulatory uncertainty. Changing the benchmark indicators before a broader ETS review could result in overlapping and competing rule changes.
EcoPolitic previously reported on the harsh criticism the European Emissions Trading System has faced. A number of countries consider it a threat to the competitiveness of European industry, especially under current energy crisis conditions.
The European Commission is trying to balance climate goals and the bloc’s economic resilience and has therefore published a list of short-term measures intended to make the ETS more flexible.
