On May 12, the European Commission launched high-level consultations on revising the EU's emissions trading system, seeking to balance industry competitiveness with climate targets as it prepares legislative proposals by July that will reshape the bloc's carbon market in the coming years.
"Climate policy has turned into industrial and security policy," Kurt Vandenberg, Director General of the European Commission's Directorate General for Climate, said at the opening of the session. He stressed the need to make ETS "a more innovative and investment engine," while ensuring that decarbonization takes place "gradually and in an orderly manner" in the face of current geopolitical challenges.
A round table at the EU headquarters in Brussels will bring together industry representatives, civil society groups and policy makers to discuss how the bloc's leading carbon market can contribute to decarbonization while supporting European producers facing rising costs and global competition. The consultations are being conducted in accordance with the recommendations of the European Council received in March, and are taking place as the Commission prepares to align the ETS with the EU's climate targets for 2040.
Terms of consideration
Beatrice Jordi, director of Carbon Markets and Clean mobility at DG CLIMA, outlined the timing of the review, saying the Commission intends to submit proposals in July for consideration by Parliament during the first quarter of 2027. According to her, the implementation of the main solutions will begin in 2028.
"ETS will not disappear," Yordi said, stressing that the system should provide a "stable, predictable long-term decarbonization signal," while increasing the competitiveness of the industry. She said that the review would examine the pace and extent of carbon sequestration and update data on the market stability reserve and benchmarks through appropriate measures.
Europe's flagship carbon market is buckling under political pressure as more EU leaders wonder whether climate policy is destroying heavy industry. The negative reaction has caused carbon prices to fall by almost 30 euros per tonne of CO2e ($35.24 per tonne of CO2e) from a mid-January high of about 93 euros per tonne of CO2e.
The Platts agency, part of S&P Global Energy, estimated EU quotas for December 2026 at a three-month high on May 11, the euro exchange rate was 77.24 euros per tonne 2e, recovering from an 11-month low of 63.64 euros per tonne 2e, reached on March 19 amid a political storm.
Discussing the issue of free
