The Council of the European Union (EU) today agreed to increase carbon licenses allocated free of charge to energy-intensive industrial sectors between 2026 and 2030 to reduce costs and prevent the relocation of production.
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16/09/2026
by
Lusa
“ O Council today defined its position on a review of legislation to increase from 2026 to 2030 the allocation of free allowances to sectors covered by the EU Emissions Trading System reference values for heat and fuel”, the institution announced.
The body that brings together EU Member States stressed that “the review will help these sectors with high energy consumption, which face a higher risk of carbon leakage, to maintain their competitiveness”, in an allusion to the process that occurs when European companies transfer their production out of the Community area or lose competitiveness to competitors from countries where emission costs are lower.
The measure integrates the broader reform of the EU Emissions Trading System.
The agreement reached by the Member States provides for the use of around 88 million allowances available for free allocation.
The Council decided to add another 33 million licences that had not previously been distributed because some installations did not meet the conditions laid down in the current rules of the EU Emissions Trading System.
In total, there are some 121 million additional allowances at stake, and the European Commission estimates that the measure will allow cost savings of around €6 billion for the sectors concerned.
The system obliges the undertakings concerned to deliver a licence for each tonne of greenhouse gases issued.
Although part of the licenses are purchased by companies, certain sectors considered to be more exposed to international competition receive free licenses, precisely to prevent carbon price from damaging their competitiveness.
The amount of free allowances is calculated on the basis of reference values, which have been revised for the period 2026-2030.
Industry and some Member States expressed concern at the reduction of these figures, arguing that it could increase the costs incurred by energy-intensive sectors.
Brussels presented a proposal last July to address these concerns, which is now at the root of the position agreed by the EU Council.
The decision does not eliminate the obligation for the companies covered by the system to account for their emissions, and the free allocation instead functions as a way of temporarily reducing exposure of certain sectors to the cost of carbon while maintaining the European emissions trading system.
The Council's agreement will still have to be negotiated with the European Parliament.