The European Commission has announced that it has proposed updated baseline values under the European Union's Emissions Trading System (EU ETS) for the period 2026-2030.

The proposal is expected to be formally adopted as an implementation act by the end of June after four weeks of public consultations and consideration by Member States within the framework of the Committee on Climate Change.

The proposal is aimed at supporting competitiveness and decarbonization

According to the Commission, the revised methodology is designed to support both industrial competitiveness and decarbonization, while strengthening stability and predictability in the EU carbon market. The Commission also stressed that the revised system should be implemented as soon as possible to support the industries most affected by the transition period.

The Commission confirmed that a broader review of the EU ETS, scheduled for July 2026, will assess whether the system remains suitable to support Europe's transition to industrial development. The review is expected to examine the effectiveness of the ETS in balancing climate objectives and industrial competitiveness.

Indirect electricity emissions are still taken into account

According to the updated methodology, indirect emissions related to electricity consumption will continue to be accounted for in 14 product benchmarks.

The Commission stated that this adjustment is aimed at supporting the electrification efforts of the industry and leads to higher reference values. According to the proposal, the financial impact of this measure is estimated at about 4 billion euros in the period 2026-2030.

The free distribution system remains central

Updating the benchmark plays an important role, and the key role in determining the amount of free emissions permits is being played across industrial producers. The Commission said the proposed benchmarks would allow companies to continue receiving free royalties covering an average of about 75 percent of emissions.

The revised baseline values are based on greenhouse gas efficiency data provided by enterprises for 2021 and 2022. The calculation methodology takes into account the efficiency of 10% of the cleanest installations in each industrial sector. Under the EU ETS system, companies whose emissions exceed control levels must purchase additional permits, while more efficient installations receive higher levels of free distribution.

The basic definitions for the steel industry have been revised

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