EU member states have agreed a negotiating position on changes to the bloc’s emissions trading system that would increase free carbon allowances for certain energy-intensive industries between 2026 and 2030.
The proposal would raise the number of free emission allowances for sectors covered by heat and fuel ETS benchmarks — reference levels used to calculate how many allowances an installation can receive for free — as part of a wider reform of the EU’s emissions trading system, the Council of the EU announced on Wednesday.
Member states, meeting at EU ambassadors’ level, backed increasing the free allocation by using about 88 million allowances already available for free allocation.
The European Commission has estimated this would equate to around €6 billion in cost savings for the affected sectors.
The Council’s position would also add a further 33 million allowances that had not previously been allocated because some installations did not meet existing ETS conditions.
Talks with the European Parliament to follow
Negotiations with the European Parliament will begin once MEPs have agreed their position, the Council said.
It added that the Irish presidency wants a rapid agreement on the final text to allow the revised benchmarks to be implemented on time.
Ireland’s Minister for Climate, Energy and the Environment Darragh O’Brien said the agreement would give more free allowances to energy-intensive sectors during what he described as a transition period.
The Council said the European Commission put forward the revision in July 2026 after concerns from industry and member states about reduced ETS benchmarks for free allowances, which were updated in June for the 2026 to 2030 period.
EU leaders noted in June 2026 that the Commission intended to bring forward a separate proposal on the issue.
