Fifteen EU states back Warsaw Declaration on carbon market reform

It followed the 9th Friends of Industry Ministerial Conference in Warsaw.

For energy-intensive manufacturers, aluminium producers and clean fuel investors, the text moves competitiveness to the centre of the carbon market debate. Its priorities include affordable energy and reliable access to secondary raw materials. They also include stronger trade defence mechanisms, technological sovereignty and reforms to the EU carbon market framework. European Aluminium, an industry group, welcomed the focus on closing the structural energy-cost gap with global competitors. It also welcomed the focus on critical raw material security and on global overcapacity and unfair trade practices. What is still unknown is whether the European Commission adopts any of this in the ETS review.

Fifteen capitals signing a text is a signal, not a decision.

The ETS review is already in play

The EU ETS review proposal was published in July 2026. It is now in the legislative phase. Transport & Environment argues the proposed framework is not fit for purpose. It says the framework cannot support clean fuel investments in aviation and maritime. It wants 50% of national ETS revenues earmarked for decarbonisation support in priority sectors, including aviation and maritime e-fuels. It also wants both sectors inside the ETS Investment Booster, the Industrial Decarbonisation Bank and the Modernisation Fund. It also calls for an e-fuels funding pool by 2028 and market-making schemes such as double-sided auctions.

Prices show a two-speed carbon market

The EEX EUA December 2026 futures contract settled at €85.42 ($95.99) per tCO2e on 16 October. The EEX UKA December 2026 contract settled at £63.36 ($84.41), leaving the EUA-UKA spread at $11.58 per tCO2e. That spread widened slightly from just under $11 on 12 October. The move followed confirmation that the EU-UK summit would take place on 20 November. Since 12 October, EUAs have settled €2.91 lower, from €88.33. UKAs softened by £2.98, from £66.34.

The UK ETS is only about one-eleventh the EU market's size.

Participants at Carbon Forward Expo 2026 in London raised the prospect of UK allowances developing a premium from 2028 if linkage does not happen. Linking the two systems would need aligned cap ambition and sectoral coverage. It would also need aligned registry infrastructure, auction rules and market-stability rules.

What happens next

The EU ETS review is in the legislative phase. The EU-UK summit is set for 20 November. T&E wants a market intermediary for e-fuels running by 2028.

Whether governments actually earmark ETS revenue, rather than routing it to general budgets, is open. The UK and EU markets may link, or they may drift apart with a UK allowance premium after 2028. Either outcome will shape costs for every regulated emitter in both systems. For energy-intensive manufacturers, that is the practical test. It is not whether competitiveness appears in the text. It is whether the carbon price still leaves room to compete.