![\"\"](\"https:\/\/www.europesays.com\/dk\/wp-content\/uploads\/2026\/07\/GettyImages-1082800026-1024x684.jpg\")
Sectors covered by the EU\u2019s new carbon border tax will see their free allowances phased out until 2034.\u00a0| Michele Spatari\/NurPhoto via Getty Images<\/p>\nTo ensure the price doesn\u2019t swing wildly, the Commission has a few tools at its disposal. The most important one is the Market Stability Reserve (MSR),\u00a0a mechanism that withdraws allowances if there are too many and releases permits if there\u2019s too few on the market. A certain amount of permits held in the MSR stash are deleted every year, eliminating those allowances \u2014\u00a0and possible emissions \u2014\u00a0for good.\u00a0<\/p>\n
Another option under discussion is introducing offsets \u2014\u00a0in the form of carbon removal certificates and\/or international carbon credits.\u00a0<\/p>\n
Removal certificates would represent one ton of CO2 taken out of the atmosphere through carbon capture technology, while foreign carbon credits account for emissions reduced outside the EU. Integrating either or both in the ETS would give companies more options to cover their pollution as the cap on domestic emissions allowances tightens.\u00a0<\/p>\n
Sectors covered by the EU\u2019s new carbon border tax will see their free allowances phased out until 2034.\u00a0| Michele Spatari\/NurPhoto via Getty Images<\/p>\n
What to watch for: Whether the Commission will tinker with the MSR, whether it will open the door to international carbon credits in the ETS, and how carbon removals will be added into the market. Removals are less controversial, as their addition would also incentivize investment in much-needed carbon capture tech, but foreign credits \u2014 which depressed the ETS price when they were traded in the 2010s \u2014\u00a0are highly contentious.\u00a0<\/p>\n
4. Polluting for free<\/p>\n
The manufacturing sector, and some power plants, currently receive a certain share of pollution permits for free to reduce the cost burden and protect them from being outcompeted by foreign firms not subject to carbon pricing. Compliance with sector-specific performance benchmarks determines how many freebies a factory gets.\u00a0<\/p>\n
Sectors covered by the EU\u2019s new carbon border tax \u2014 steel, cement, aluminum, fertilizers, hydrogen and electricity \u2014\u00a0will see their free allowances phased out until 2034. That\u2019s to ensure the EU remains compliant with World Trade Organization subsidy rules.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"To ensure the price doesn\u2019t swing wildly, the Commission has a few tools at its disposal. The most…\n","protected":false},"author":2,"featured_media":131796,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[104],"tags":[3326,3974,211,20094,210,34493,6024,48912,6025,853,875,25033,814,3038,926,49,4157,2073,2819,12230,3661,1534,16289,240,1412,6501],"class_list":["post-131795","post","type-post","status-publish","format-standard","has-post-thumbnail","category-brussels","tag-airlines","tag-aviation","tag-belgium","tag-benchmarks","tag-brussels","tag-carbon-border-tax","tag-carbon-capture","tag-carbon-removals","tag-co2","tag-electricity","tag-emissions","tag-emissions-trading-system","tag-energy","tag-greenhouse-gas-emissions","tag-hydrogen","tag-industry","tag-investment","tag-manufacturing","tag-pollution","tag-ports","tag-shipping","tag-steel","tag-subsidy","tag-trade","tag-transport","tag-waste"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@dk\/116947145593806869","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/posts\/131795","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/comments?post=131795"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/posts\/131795\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/media\/131796"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/media?parent=131795"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/categories?post=131795"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/tags?post=131795"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}