ETS: ENVI Committee backs 100 million extra free allowances to shield industry from carbon leakage

The European Parliament's ENVI Committee backs nearly 100 million extra free EU ETS allowances for industry in 2026-2030 and more funding to modernise district heating.

On 19 October 2026, MEPs adopted a position on the Commission’s proposal to revise the EU ETS heat and fuel benchmarks for 2026 to 2030, by 64 votes in favour, 11 against and 2 abstentions.

According to Parliament, the aim is to better protect industry against the risk of “carbon leakage” (when energy-intensive businesses relocate activities outside the EU to countries with looser climate rules). Like the Commission, they want to use all allowances available for free allocation in that period, now estimated at around 88 million.

11 million allowances withheld from installations that failed to meet ETS conditions would be…