Reform of the EU Emissions Trading System (ETS)

Summary

The proposal reforms the EU ETS to support sustainable fuels and carbon removal technologies while linking free emission allowances to mandatory industrial decarbonisation investments.
10 21.10.2026
Other
energy
economy
industry
transport
environment
air transport
waste management
business and competition
maritime and inland waterway transport

Key points

  • Increased support for sustainable aviation fuels, specifically reserving allowances for renewable fuels of non-biological origin.
  • Alignment of maritime transport rules with international standards to prevent companies from being taxed twice for the same emissions.
  • Integration of permanent carbon removal technologies, including biochar and direct air capture, into the ETS framework.
  • Introduction of 'investment conditionality,' where receiving free emission allowances becomes dependent on companies following a decarbonisation plan.
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