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REPORT (COM(2026)0619 – C10-0189/2026 – 2026/0211(COD))

On the proposal for a regulation of the European Parliament and of the Council amending Directive 2003/87/EC as regards revised benchmark values for the heat and fuel benchmarks for the period from 2026 to 2030

A-10-2026-0276

Committee on the Environment, Climate and Food Safety · Rapporteur: Adam Jarubas

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Parliament's amended version of a proposed regulation amending Directive 2003/87/EC on revised heat and fuel benchmark values for 2026 to 2030. It increases the allowances available for free allocation and splits unallocated allowances between free allocation, the Modernisation Fund and the Innovation Fund. It sets a new maximum annual reduction rate for updating the heat and fuel benchmarks from 2027 to 2030, and requires the Commission to set sector-specific sub-benchmarks under the fuel benchmark where it finds significant discrepancies. It adds a principle that free allocation should be based on product benchmarks rather than inputs, and asks for transparent determination of benchmark values.

Committee position. The committee proposes adopting Parliament's first-reading position with amendments: more free allocation for 2026 to 2030, a new split of unallocated allowances, a revised reduction rate for heat and fuel benchmarks, and sector-specific fuel sub-benchmarks.

Key points

  1. Recital 2 is amended so that free allocation for 2026 to 2030 is increased to protect against carbon leakage, using around 88 million allowances from the CSCF Decision.
  2. A third of the allowances not allocated due to reduced free allocation, around 11 million, goes to free allocation; another third, around 11 million, goes to the Modernisation Fund, including for district heating.
  3. The last third of those allowances stays with the Innovation Fund; the additional free allocation corresponds to an indicative 12,5 % reduction to the fallback benchmarks.
  4. A new recital states that free allocation should be based on product benchmarks rather than inputs, and that benchmark determination should be transparent as regards selection rules, methodology, assumptions and source data.
  5. Article 10a(1), sixth subparagraph is replaced: unallocated allowances are split one third for paragraph 2a, one third auctioned with revenues to the Modernisation Fund, and one third to the Innovation Fund.
  6. The maximum annual reduction rate for updating heat and fuel benchmarks for 2027 to 2030 is set to a value that uses the additional allowances and ensures no reduction under paragraph 5 applies.
  7. Where the Commission finds significant and clearly documented discrepancies between the Union-wide ex-ante fuel benchmark and sub-installations in a sector, it must establish sector-specific sub-benchmarks.
  8. The Commission must adopt delegated acts with criteria, sector definitions, system boundaries and starting values within three months of publication of the amending regulation.
  9. The Commission must determine the sub-benchmark values by implementing acts within six months of publication, following the examination procedure in Article 22a(2).

Who is affected

  • Industrial sectors covered by free allocation, which receive more allowances and may get sector-specific fuel sub-benchmarks.
  • The Commission, which must adopt delegated and implementing acts setting criteria and sub-benchmark values.
  • The Modernisation Fund and the Innovation Fund, which receive shares of unallocated allowances.

Figures and deadlines

  • Around 88 million allowances available for free allocation under the CSCF Decision.
  • Around 11 million allowances to free allocation and around 11 million to the Modernisation Fund.
  • An indicative 12,5 % reduction to the fallback benchmarks.
  • Three months from publication for the delegated acts.
  • Six months from publication for the implementing acts.

Legal basis: Article 294(2) and Article 192(1) of the Treaty on the Functioning of the European Union.