1 2026 State of the EU ETS Report Antwerp Stock Exchange (1898) Andrei Marcu, Florian Bourcier, Jean-Yves Caneill, Emma Coker, Rosy Finlayson, Alexandra Maratou, Cecilia Meinardi, Tommaso Paperini, Marco Sangiovanni 2026 State of the EU ETS Report 2 Disclaimer The views expressed in this Report are attributable only to the authors in a personal capacity, and not to any institution they may be associated with, nor to the funders of the Report. This Report has been the subject of stakeholder consultations, including a workshop convened by the authors with stakeholders including NGOs, think tanks, academia, policymakers, market participants, and industry representatives. The authors thank them for their continued support for this Report. The European Roundtable on Climate Change and Sustainable Transition (ERCST) is a Brussels-based think-tank incorporated as non-profit organisation under Belgian law. ERCST provides rigorous intellectual analysis of EU and international climate change developments and policies, drawing on the experience and research of its staff as well input from stakeholders who participate in its activities. ERCST provides original ideas and research into European and international debates on climate change policy. It represents its own views and strives to strictly ensure its independence and integrity. BloombergNEF (BNEF) is a strategic research provider covering global commodity markets and the disruptive technologies driving the transition to a low-carbon economy. Its expert coverage assesses pathways for the power, transport, industry, buildings, and agriculture sectors to adapt to the energy transition. The organisation helps commodity trading, corporate strategy, finance, and policy professionals navigate change and generate opportunities. One of the world’s leading economic consulting firms, Compass Lexecon provides law firms, corporations, and government clients with clear analysis of complex issues. Compass Lexecon is internationally recognised as a leading economic consulting firm with preeminent competition, finance, intellectual property, international arbitration, and energy practices. With more than 425 professionals in 20 offices around the world, Compass Lexecon offers a global perspective on economic matters, including energy and climate issues 2026 State of the EU ETS Report 3 2026 State of the EU ETS Report Table of Contents Takeaways ............................................................................................................................ 7 1. Background ................................................................................................................... 9 2. An EU ETS “fit for purpose” ......................................................................................... 10 2.1. Long-term competitiveness ................................................................................... 10 2.2. Promote carbon pricing ......................................................................................... 11 3. Regulatory developments ........................................................................................... 12 3.1. Secondary legislation ............................................................................................ 12 3.2. Other policies impacting the EU ETS ...................................................................... 13 3.2.1. CISAF .................................................................................................................. 13 3.2.2. 2040 Climate Target ........................................................................................... 14 3.2.3. CBAM — Omnibus I Simplification ...................................................................... 14 3.2.4. CBAM — December 2025 Legislative Package .................................................... 14 3.2.5. Omnibus I Package— CSRD ................................................................................. 14 3.2.6. Omnibus I Package— CSDDD .............................................................................. 14 3.2.7. Amendment to the ETS State Aid Guidelines ...................................................... 15 3.2.8. Member State Policies ........................................................................................ 15 3.3. International carbon price developments .............................................................. 16 3.3.1. Impacts of the UK ETS on the EU ETS .................................................................. 16 3.3.2. Linking with other markets ................................................................................. 17 3.3.3. Article 6 of the Paris Agreement ......................................................................... 18 4. Environmental delivery ............................................................................................... 18 4.1. Delivery against Phase 4 target .........................................................
