Revised heat and fuel benchmark values for 2026-2030

Key points

1. Free allocation for the 2026-2030 period under the heat and fuel benchmarks ('fallback benchmarks') should be increased to address industrial concerns and protect against carbon leakage.¶
2. The maximum annual update rate for the fallback benchmarks is adjusted using around 88 million allowances available for free allocation under the CSCF Decision, plus around 11 million unallocated allowances.
3. Of the unallocated allowances, another third (around 11 million) goes to the Modernisation Fund for investments including district heating modernisation, and the last third stays with the Innovation Fund.
4. The additional allowances for free allocation correspond to an indicative 12,5 % reduction to the fallback benchmarks.
5. Free allocation should in principle be based on product benchmarks rather than inputs, and benchmark determination should be transparent as regards selection rules, methodology, assumptions and aggregated source data.¶
6. Allowances not allocated due to reduced free allocation are split: one third for paragraph 2a purposes, one third auctioned with revenues to the Modernisation Fund, one third to the Innovation Fund.¶
7. For 2027-2030, the maximum annual reduction rate for heat and fuel benchmarks is reduced to a value that uses the additional amount and the allowances in the sixth subparagraph of paragraph 1, ensuring no reduction under paragraph 5 applies.¶
8. Where the Commission finds significant, clearly documented discrepancies between the Union-wide ex-ante fuel benchmark and the emission performance of sub-installations in a sector, it shall set sector-specific sub-benchmarks.¶
9. Within three months of publication, the Commission shall set criteria, sector definitions, system boundaries and starting point values in delegated acts; within six months it shall determine sub-benchmark values by implementing acts.