EU negotiators agree extra free carbon allowances for energy-intensive industry

The overnight agreement

Negotiators for the European Parliament and the EU member states reached an agreement overnight from Thursday, 12 November, into Friday, 13 November 2026, to give energy-intensive industries extra free allowances under the EU Emissions Trading System (ETS). The deal adds about 120 million free allowances for the period from 2026 to 2030, according to the Parliament and the member states. Both sides announced the agreement, which is still subject to formal approval. The compromise revises the benchmark values for heat and fuels that determine how many free allowances installations in chemicals, glass and ceramics can receive. Under the ETS, companies must surrender allowances for each tonne of CO2 they emit, and those allowances can be bought, sold or traded. Because the overall cap on emissions is lowered step by step to meet EU climate targets, the number of free allowances is recalculated at regular intervals. Those volumes fall automatically every five years, and the affected sectors had warned months earlier about carbon leakage, the risk that production moves to countries with weaker climate rules.

Figures that differ between outlets

The articles do not agree on the total, and the figures depend on the source. The Commission's July proposal allocated 88 million free allowances for 2026 to 2030, and negotiators added 33 million on top of that. The Commission puts the resulting 121 million allowances at more than 10 billion euros in value. Parliament describes savings of several billion euros, while the Commission had put the savings from its July proposal at about 6 billion euros. Tagesschau reports 221 million additional certificates, a figure that does not match the 88 million plus 33 million breakdown given elsewhere.

Commission proposal, July88

Added by Parliament and member states33

Commission proposal, July

88 million allowances

Added by Parliament and member states

33 million allowances

Data from the article text

Reactions

Climate Commissioner Wopke Hoekstra described the agreement as a strong sign that Europe takes industrial competitiveness seriously. He said the EU is listening to the concerns of European companies and taking concrete steps against carbon leakage. Peter Liese, a CDU member of the European Parliament and one of its chief negotiators, welcomed the outcome in direct terms.

“The compromise now gives companies additional breathing room.”

Liese said the relief is likely to be considerably higher than the 6 billion euros previously cited.

Next steps

The compromise still has to be formally adopted by Parliament and the member states. After that, according to the member states, the Commission can issue implementing rules for calculating the benchmark values. The Commission also proposed further changes to the ETS in July, and those are still under negotiation. The EU aims to cut its greenhouse gas emissions by 90% by 2040 compared with 1990.