EU approves softer ETS benchmarks and €30 bn for decarbonisation
The European Commission has published a draft of updated benchmark values for the ETS for the period 2026–2030. These are the values that determine how many free emission allowances industrial companies will receive.
The proposal looks more favourable than industry expected. Key figures:
- average coverage with free allowances: ~75 % of industry emissions
- the Commission uses "legal flexibilities available" → some benchmarks will be higher
- coverage of indirect electricity emissions retained for 14 product benchmarks
- financial impact of the measure on ETS revenues: ~€4 bn in the period 2026–2030 (= that much less money for climate projects from auctions)
Without this adjustment, industry would face much stricter benchmarks – the old values were calculated from data from 2007–2008 and modern efficient plants would receive few. The new benchmarks reflect technological progress, but with a "softer" interpretation.
Timing:
On 30 April 2026 a 4‑week public consultation was launched; during May–June an assessment will take place in the Climate Change Committee (member states). By the end of June 2026 the Commission should adopt the final benchmark values and start allocating free allowances. By the end of July a comprehensive review of the entire ETS system is expected.
"ETS Investment Booster" – €30 bn for decarbonisation:
The Commission is simultaneously preparing a €30 bn fund financed by 400 million ETS allowances, which will go directly to industrial decarbonisation projects. This is a strong signal: the money that industry pays for its emissions will be returned to it in the form of investment support.
The Commission will also propose sector‑specific fallback benchmarks – rules for situations where standard benchmark values cannot be applied. This is important for sectors with very heterogeneous production (chemicals, glass, paper).
What to take away?
1. The EU is making a compromise. Between ambition (stricter benchmarks = higher ETS costs = stronger signal for decarbonisation) and competitiveness (softer benchmarks = lower pressure, but protection against carbon leakage) the Commission chose a milder approach. This follows the trend of recent weeks – compensation for Austria and Spain, approval of the German CCfD for €5 bn.
2. The social contract of climate policy. The formula is now clear: industry pays the ETS, but receives part of the money back through the Innovation Fund, the Modernisation Fund, CCfD, and now the ETS Investment Booster. For companies this means that decarbonisation CAPEX has a real pathway to public co‑financing.
3. For the Czech Republic: Czech industry (steelworks, cement plants, chemicals, glass) can benefit from the €30 bn ETS Investment Booster – but only if it has ready projects. The Modernisation Fund should be on the table today for every energy‑intensive company in the Czech Republic.
4. For investors: Milder ETS benchmarks mean lower short‑term price pressure on ETS sectors, but also a stronger long‑term certainty that it will not turn into a sudden‑death regulation. For stock pickers in steel/cement/chemicals this could mean that the risk premium on European carbon‑intensive equities is now overheated.
5. The risk of greenwashing, on the contrary, is rising. If companies receive 75 % of allowances for free and at the same time sell products with a "low carbon" label, the question is how much of this signal is genuine decarbonisation versus regulated carbon accounting. CSRD and SBTi audits will be critical.
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