Fifteen EU states back Warsaw Declaration as ETS review turns into industrial policy

Fifteen states put competitiveness at the centre

The text calls for a stronger industrial policy built around competitiveness, economic security and manufacturing resilience. Its priority list runs from affordable energy and reliable access to secondary raw materials to stronger trade defence mechanisms and technological sovereignty. European Aluminium welcomed the focus on closing the structural energy-cost gap with global competitors. It also welcomed the focus on critical raw material security.

One option is to earmark ETS revenue for decarbonisation. Another is to keep the market liquid while the UK linkage question returns on 20 November. The final shape of the ETS review is not settled. It is also unclear how far the declaration moves it.

The ETS review is already an investment debate

The EU ETS review proposal was published in July 2026 and is meant to fit the bloc's 2040 climate targets. It also carries an explicit ambition. The aim is to turn the ETS into "an engine for innovation and investment".

CleanTechnica published a policy brief from T&E. The brief argues the proposed framework is not fit for purpose for clean fuel investment in aviation and shipping. Those sectors are major contributors to ETS revenue generation, the brief notes. It wants 50% of national ETS revenues earmarked for decarbonisation support in priority sectors, including aviation and maritime e-fuels. It proposes an e-fuels funding pool by 2028, plus market-making through double-sided auctions. It says those auctions are needed so pending final investment decisions can proceed.

Allowance prices and the UK linkage question

The EUA December 2026 futures settled at €85.42 ($95.99) per tCO2e on 16 October, Fastmarkets reported. The UKA December 2026 contract settled at £63.36 ($84.41). That leaves a spread of $11.58 per tCO2e.

That gap widened slightly from just under $11 on 12 October, after confirmation that the EU-UK summit would take place on 20 November. Speakers at Carbon Forward Expo 2026, held in London on 14-15 October, described the standalone UK market as tight. The UK ETS is roughly one-eleventh the size of the EU market. Linkage would give UK participants access to a much larger, more liquid market. It would also require convergence on cap ambition, sectoral coverage and market-stability rules, panellists said.

Cluster design matters

India's Carbon Credit Trading Scheme covers 748 industrial plants across eight sectors, IEEFA notes. Its carbon is heavily concentrated. The 10 districts with the highest covered emissions hold 36.4% of the scheme's carbon from just 17% of obligated plants.

Eastern India accounts for 20% of the plants but 30% of the emissions and 36% of the reductions required in the first compliance cycle. Iron and steel drive most of that gap. The sector has 106 of the region's 152 obligated plants and close to three quarters of its emissions. The scheme counts Scope 2 emissions, which makes clean power a direct compliance lever. Clustered plants buying cleaner power together could support larger renewable and storage projects than plant-by-plant procurement, IEEFA argues. That depends on state rules for open access and wheeling charges keeping pace.

What happens next

The EU-UK summit on 20 November is the nearest dated marker. The EUA-UKA spread now depends on when the market expects fungibility between the two systems.

On investment, the brief targets a 2028 e-fuels funding pool. That is the longest lead time in play. Double-sided auctions are its answer to stalled final investment decisions in the European e-fuels market.

The declaration gives 15 governments a shared position on the ETS review. Whether that shifts the review text is not yet clear.