Accelerating industrial transition : policy priorities for the 2026 EU ETS review

The European Union (EU) is approaching a crucial moment in its climate and industrial strategy. As work begins on the 2026 review of the EU Emis sions Trading System (ETS), recent trends show a mix of encouraging progress and persistent chal lenges across sectors and regions. This policy brief sets the scene for that discus sion. It begins by outlining the latest developments in emissions and industrial performance within ETS-covered sectors. It then examines how firms are responding to carbon pricing on the ground. Following this, the brief analyses the results of the 2025 European Commission public consultation on the Emissions Trading System (ETS) for 2026. It explores stakeholders’ views on the future use of ETS revenues and outlines recommendations for the 2026 review.