Preparing the 2026 EU ETS/MSR review

The rapidly evolving geopolitical and economic context is putting pressure on EU climate policy and will have an impact on the 2026 review of the EU Emissions Trading System (ETS) and Market Stability Reserve (MSR). The EU ETS has been key in reducing EU emissions to date in a gradual and cost-effective way, and this pragmatic approach should be continued. This brief calls for moderating carbon-price volatility and aligning the ETS with industrial policy to accelerate investments in low-carbon technologies, not least through a focused use of free allowances.