European energy-intensive industries called in Brussels on 5 November for unconditional benchmark-based free emissions allowances and changes to the EU Emissions Trading System (EU ETS) as the Carbon Border Adjustment Mechanism (CBAM) is introduced. A joint industry position published on 4 November sets out the groups’ demands, which are not an adopted amendment.
The groups want benchmark-based allocation protected without additional investment conditions. They said manufacturers face high energy costs, global trade competition and carbon charges they cannot always recover through selling prices, and warned that further restrictions on free allocation could reduce their capacity to fund decarbonisation.
The position also seeks changes to the cross-sectoral correction factor, which can reduce free allowances for eligible installations when total demand exceeds the available allocation. Changes to allocation would directly affect domestic production costs in steel, aluminium, cement and fertilisers, while free allowances are progressively reduced in industries covered by CBAM.
Industry representatives called for effective protection against imports for European producers investing in cleaner technologies. They also want arrangements for exports and downstream manufacturers competing in markets where carbon prices may be lower, alongside a durable solution for European exports and better industrial benchmarks.
The groups called for more emissions-trading revenue to be recycled into decarbonisation investment. They estimated that only 5% of emissions-trading revenues had gone back to energy-intensive industries, while noting that the estimate depends on how industrial support is classified.
The debate may affect future carbon-cost comparisons for exporters in Serbia, Montenegro and other non-EU markets. Changes to EU free allocation can alter benchmark adjustments relevant to CBAM, but domestic relief for EU producers does not automatically give foreign suppliers a corresponding exemption.
Until legislation changes, the existing free-allocation and CBAM calculation rules remain applicable. The industry intervention makes the case for modelling alternative EU ETS reform scenarios separately from current-law import costs, rather than treating the groups’ proposals as rules already in force.