The first day of the European Council, Thursday 18 June, was devoted to European competitiveness. The discussion was due to focus mainly on the instruments available to the European Union to address China’s “aggressive” competition and on how it can protect its industries through the single market (see EUROPE 13890/2).
However, certain Member States, determined to discuss the Emissions Trading System (‘ETS’ or EU ETS) before its review by the European Commission, scheduled for next 15 July, succeeded in imposing their own agenda. As a result, a formalisation of the outcome of the 15 June vote in the Climate Change Committee found its way into the draft conclusions of the Heads of State or Government, seen by Agence Europe, at the initiative of Member States historically opposed to the ‘ETS’ system.
A vote on ETS at the start of the week. In fact, during Monday’s vote on a draft implementing act containing the revised benchmark values for the 2026-2030 ETS period, the delegations asked the Commission to adopt separate legislation on ‘fallback benchmarks’ (see EUROPE 13889/17).
These benchmarks concern industries whose products do not have dedicated benchmark values, such as certain metals or chemicals. The legislation, which are also expected to be presented on 15 July, could increase the free allocations granted to the industries concerned and remove the cap on the additional allowances to be allocated to them. Moreover, this change could be retroactive and cover allocations granted from 1 January 2026 until 31 December 2030.
ETS gradually imposed itself. In a preliminary version of the conclusions dated 12 June, no mention of the ETS system had been included under the ‘competitiveness’ section. A first mention appeared in the provisional conclusions of 16 June, limited to mention of the ETS review by mid-July. The 18 June draft conclusions explicitly mention industrialists’ concerns and the latest developments regarding the ‘ETS’ system.
“The European Council welcomes the Commission’s intention to come forward with a concrete proposal by mid-July 2026 on the review of the ETS system (...) and, at the same time, to present a separate proposal to address concerns expressed by some industrial sectors on ETS benchmarks, while preserving the essential role of the ETS in the climate and energy transition”, it is stated in the draft, which the leaders had not adopted during their first working session.
To see the draft European Council conclusions: https://aeur.eu/f/men (Original version in French by Nadège Delépine with the editorial staff)