On 16 September 2026, the Council of the EU agreed its position on a targeted amendment to the emissions trading system. The aim is to increase free allocation from 2026 to 2030 for sectors covered by the heat and fuel benchmarks that face a higher risk of production and emissions moving outside the EU.
Under the Council's position, approximately 88 million allowances available for free allocation would be used for the increase. The European Commission estimates that this part would deliver around EUR 6 billion in savings for the sectors concerned. The Council proposes adding approximately 33 million allowances that were previously unallocated because certain installations had not met existing ETS conditionalities.
The measure matters to energy-intensive industries facing strong international competition. The benefit for a particular operator will depend on whether its installation's free allocation is calculated under the heat or fuel benchmark and whether it meets the related conditions. The Council's position retains the existing reduction rate for certain oil and gas extraction, petroleum refining and pipeline transport activities. Free allowances reduce cost pressure, while emissions monitoring, surrender obligations and related energy-efficiency measures remain part of the ETS framework.
The Council's position is one stage of the legislative process. Negotiations with the European Parliament will begin after Parliament adopts its position. Industrial companies can already review their benchmarks, allocation conditions and projected allowance shortfall through 2030, and quantify the final financial effect once the institutions agree the text.