European Union member states are expected to call on the European Commission to propose reforms to the bloc’s carbon market by July 2026, according to draft conclusions prepared for an upcoming summit of EU leaders seen by Reuters.
At the European Council meeting scheduled for March 19, governments will request a review of the EU Emissions Trading System (ETS) aimed at reducing carbon price volatility and limiting its impact on electricity prices.
Focus on stabilizing carbon prices
The draft text indicates that the European Commission should present proposals designed to stabilize the carbon market while maintaining the system’s central role in supporting the EU’s energy transition. The EU ETS functions by setting a cap on greenhouse gas emissions and allowing companies to buy and sell emission allowances within that limit.
Despite its central role in EU climate policy, the carbon market has faced increasing political pressure from some member states concerned about its impact on energy prices. Countries including Slovakia and the Czech Republic have argued that rising carbon prices are contributing to higher electricity costs and have called for measures ranging from market reforms to a potential suspension of the system.
Commission expected to present review in 2026
The European Commission has previously indicated that it plans to present proposals to review the ETS during the third quarter of 2026, although an exact timetable has not yet been confirmed.
The planned review is expected to focus on balancing the EU’s climate objectives with concerns over industrial competitiveness and energy affordability across the bloc.
