Free emission allowances ETS 2026-2030: what your industry receives

Key data

European industries subject to the European emissions trading system (ETS) already know how many free allowances they will receive between 2026 and 2030. Decision (EU) 2026/1312, adopted on 15 June 2026, closes the validation process for the national implementation measures submitted by each Member State, including Spain.

The result is final: each industrial installation is left with a free allocation set for the next five years. Companies that have not reviewed their position on the approved national lists are exposed to a costly surprise in the carbon market.

What does this regulation establish?

The ETS system requires industrial installations to hold emission allowances equivalent to their actual greenhouse gas emissions. Part of these allowances is allocated free of charge to protect sectors with the greatest risk of "carbon leakage", that is, sectors that could move their production outside the EU if they had to bear the full cost of allowances.

The process works as follows:

• Each Member State draws up a list of eligible installations and the proposed free allocation volumes.
• The European Commission reviews those lists and validates or corrects them through this Decision.
• The approved allocations are those that govern the entire 2026-2030 period.
• The reference data used to calculate allocations is the critical technical element: if they contain errors, the resulting allocation may be lower than it should be.

The legal basis is Article 11, paragraph 3, of Directive 2003/87/EC, which gives the Commission the power to reject national measures in whole or in part if they do not meet ETS system requirements.

Economic and operational impact

The free allocation of allowances has a direct and quantifiable economic value. Each emission allowance (EUA) is equivalent to one tonne of CO₂ and is traded on the European carbon market. Receiving fewer free allowances than you are entitled to means having to buy the difference on the market, at market price.

The concrete operational consequences are:

• Higher compliance costs: installations with reduced allocations or excluded from the lists must acquire additional allowances on the secondary market or through auctions.
• Impact on financial planning 2026-2030: the approved allocation determines the carbon budget of the installation for the next five years.
• Carbon leakage risk mitigated for those included: installations correctly included on the lists maintain their competitiveness against non-EU producers who do not bear this cost.
• Risk of error in reference data: if the historical activity or emissions data used to calculate the allocation are incorrect, the company may have been left with fewer free allowances than it is legally entitled to.

Who does it affect?

• Industrial installations included in the ETS: sectors such as steel, cement, glass, paper, refining, chemicals, aluminium and others with significant CO₂ emissions.
• Companies with installations in Spain whose allocations have been validated or corrected by the Commission in this Decision.
• European business groups with installations in several Member States, which must verify the outcome in each country.
• CFOs and financial directors responsible for planning carbon costs for the 2026-2030 period.
• Environmental compliance officers (EHS/ESG) who manage the company's emission allowance position.
• Carbon advisors and consultants who support industrial companies in their ETS strategy.

Practical example

Imagine a cement production plant in Spain included in the ETS. For the 2021-2025 period, the installation received an annual volume of free allowances calculated on its historical production data and the sector efficiency reference values ("benchmarks").

With Decision (EU) 2026/1312, the Commission has reviewed the Spanish national list. If the reference data that the Member State submitted for this installation contains any error—for example, a reference production lower than actual, or an incorrect sub-installation classification—the approved allocation may be lower than it should be.

The practical result: if the plant emits 500,000 tonnes of CO₂ per year and receives free allowances for only 400,000 tonnes, it must buy 100,000 additional allowances on the market each year for five years. At current European carbon market prices, this represents a very significant additional cost on the income statement, which would not have been budgeted if the company had not reviewed its position on the approved lists.

That is why immediate verification of the reference data used is not a bureaucratic formality: it is a financial decision with direct impact on EBITDA for the 2026-2030 period.

What should companies do now?

1. Locate the installation on the approved national lists: verify that the installation appears on the list validated by the Commission for Spain and that the identification data are correct.
2. Review the approved free allocation volume: compare the approved allocation with internal expectations and with the installation's historical reference data.
3. Audit the reference data used: environmental compliance officers must review the activity and emissions data that the Member State submitted to the Commission, as they are the basis for the calculation.
4. Quantify the financial impact 2026-2030: the CFO must incorporate the approved allocation into multi-year financial planning, estimating the cost of allowances that will need to be purchased on the market.
5. Evaluate options if the allocation is lower than expected: in case of discrepancies, consult with an ETS specialist advisor on the review or appeal mechanisms available before the competent national authority.
6. Update the carbon hedging strategy: with the final allocation now known, review the strategy for purchasing additional allowances (secondary market, auctions) for the 2026-2030 period.

Official source

Consult full regulation on official source

Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://eur-lex.europa.eu/./legal-content/AUTO/?uri=OJ:L_202601312