Commissioner Wopke Hoekstra has defended the steep reduction in free CO2 allowances for energy-intensive sectors such as ceramics, while pledging a separate legislative amendment to increase free allocation for fall-back benchmarks that largely cover the sector. The answer, given on 29 July 2026 to a parliamentary question by MEPs Leire Pajín and Sandra Gómez López (both S&D), signals the Commission's intent to balance the EU's climate neutrality trajectory with industrial competitiveness concerns.
The question raised alarm over the revised benchmark limits published on 5 November 2025 by the Expert Group on Climate Change Policy, which cut free allowances by nearly 50% for ceramics and other thermal-intensive sectors. The MEPs warned that abolishing free allocation would destroy the competitiveness of industries lacking technological alternatives and electrification infrastructure, threatening over 200,000 jobs in regions like Emilia-Romagna and Castellón.
Hoekstra's reply acknowledges the legal obligation under the ETS Directive to update benchmarks and reduce free allocation over time, noting that the Commission had no discretion to deviate from the framework without causing uncertainty and delays. However, he points to a commitment made during the Climate Change Committee's favourable opinion on the Benchmark Regulation: the Commission will propose a separate amendment for the 2026-2030 allocation period aimed at increasing free allocation determined on the basis of fall-back benchmarks, which are largely relevant for the ceramics sector, while avoiding the cross-sectional correction factor.
The answer contains a concrete policy commitment — a legislative amendment — but lacks specific numerical targets or a timeline for its proposal. The direction is a partial recalibration of the ETS free allocation regime to cushion the impact on sectors with limited decarbonisation options, without abandoning the overall trajectory toward climate neutrality. Institutional follow-up is expected in the coming months as the Commission prepares the amendment, which will require adoption through the ordinary legislative procedure involving the European Parliament and Council.
Ceramics producers and other thermal-intensive industries stand to benefit from increased free allocation, reducing their carbon cost exposure and preserving competitiveness. EU climate objectives face a moderate setback if the amendment slows emissions reductions in these sectors. National authorities in ceramic-producing regions gain breathing space to develop electrification infrastructure. EU taxpayers and consumers may see slightly higher ETS revenues if free allocation is increased, but also potentially lower carbon leakage risk and job losses.