EU ETS: European Commission Announces Additional Flexibilities, Including Updated Benchmarks

The European Commission has announced a package of reforms to modernize the EU ETS, balancing climate ambition with energy security and industrial competitiveness. Key measures include updated benchmarks that would allow industries to continue receiving free allocations covering around 75% of emissions between 2026 and 2030, a strengthened Market Stability Reserve to reduce carbon price volatility, and a €30 billion ETS Investment Booster funded through the sale of 400 million allowances. The Commission is also conducting a broader ETS review, expected in July 2026, which will examine the phase-out of free allocations, maritime competitiveness, carbon removals, and potential ETS expansion. The reforms reflect growing concerns over energy costs and economic resilience across Europe.
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