The Council of the European Union and the European Parliament reached a provisional agreement on November 12 to increase free carbon allowances for eligible energy-intensive industries during 2026–2030.
The agreement provides approximately 121 million additional free allowances under the EU Emissions Trading System (ETS), aiming to maintain industrial competitiveness and reduce the risk of carbon leakage.
The allocation includes around 88 million allowances made available under existing ETS rules, an additional 28 million previously unallocated allowances, and 5 million allowances reserved for particularly exposed energy-intensive sectors.
The revision applies to industries covered by heat and fuel benchmarks, which determine free allocations based on energy consumption where product-specific benchmarks are unavailable. These benchmarks account for approximately 25% of total free ETS allocations.
Unused allowances will be redirected to the Modernisation Fund and Innovation Fund to support industrial investment and technological development.
The agreement remains subject to formal approval by the Council and Parliament before implementation.
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