European Industry Urges EU Emissions Trading Overhaul
Thirteen industry associations representing energy-intensive sectors call for revisions to the EU Emissions Trading System in a joint position paper.
Updated on Nov. 9, 2026 in Electric Vehicles
Thirteen European industry associations representing energy-intensive sectors signed a joint position paper titled A Competitive EU ETS for Industrial Decarbonization. The group calls for revisions to the EU Emissions Trading System, including changes to free allocation and benchmarking.
Why it matters
The associations argue that free allowances are meant to protect European producers from carbon leakage rather than to subsidize decarbonization investment. Their proposals could shape how industrial emissions costs and investment incentives are balanced across the EU.
Thirteen associations signed the paper, and only 5 percent of ETS revenues have so far returned to energy-intensive industries. The benchmark-based allocation system is built on emissions patterns established before 2013.
The players
EUROFER
The European steel industry association that is among the signatories of the joint position paper on EU ETS reform.
Cefic
The European Chemical Industry Council that is among the signatories calling for revisions to the EU Emissions Trading System.
The details
The paper, signed by groups including EUROFER, Cement Europe, Cefic, Cepi and FuelsEurope, proposes increasing the share of allowances available to industrial installations. It also recommends improving ETS benchmarking methodologies so emissions requirements remain technologically achievable.
Timeline
Joint position paper published in 2025-2026 (exact date not specified in the source).
Roadmap
The push to rebalance free allocation against auctioning reflects the EU's ongoing effort to pair carbon pricing with protections for energy-intensive industry. The associations argue the current benchmark system, rooted in pre-2013 emissions data, no longer reflects the decarbonization pathway industry now faces.
Changes to free allocation and benchmarking could alter the carbon costs that energy-intensive manufacturers face. Shifts in allowance levels would directly affect production investment decisions across affected industrial sectors.
The takeaway
Carbon pricing policy is increasingly a balancing act between climate targets and industrial competitiveness. Watching how allowance rules evolve will indicate how costs for heavy manufacturers may shift over time.
Further reading
Explore more coverage in our Electric Vehicles section for broader context on the industry's transition.
