Governments of the member states of the European Union are expected to ask the European Commission to present proposals by July 2026 to reform the bloc’s carbon market, according to draft conclusions prepared for next week’s EU leaders’ summit, as reported by Reuters.
The issue will be discussed during the EU summit scheduled for March 19, where leaders will urge Brussels to review the EU Emissions Trading System (ETS).
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Reducing carbon price volatility
According to the draft conclusions, EU leaders want the ETS review to focus on:
- reducing carbon price volatility
- limiting the impact on electricity prices
At the same time, the document emphasizes that the ETS should remain a central instrument in the EU’s energy transition.
Pressure from some member states
Several countries, including Slovakia and Czech Republic, have called for suspending or adjusting the ETS, arguing that it contributes to higher energy bills.
However, the draft suggests the EU aims for reform rather than suspension, maintaining the system while addressing its impact on energy markets.
Proposal expected later this year
The European Commission has indicated it plans to present the reform proposal in the third quarter of 2026, although no exact timeline has been confirmed.
The ETS remains the EU’s main mechanism for reducing greenhouse gas emissions by requiring companies in sectors such as energy and industry to purchase carbon emission allowances.
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