Overview
- EU leaders reached a late-night political compromise that preserves the planned 2028 start date for ETS2 while inviting the Commission to update its impact assessments and review the system’s design.
- Italy, led by Prime Minister Giorgia Meloni, pushed hardest for a delay or softening of ETS2 and sought extra fiscal flexibility to offset energy and inflation costs, with public backing mainly from Greece and the Visegrad states.
- The Council text asks the Commission to explore measures to make the carbon market more transparent and predictable and to propose safeguards to reduce price volatility and limit effects on electricity bills.
- Talks over the EU’s next long-term budget (MFF 2028–34) remain unresolved after Italy’s ‘Friends of Cohesion’ campaign to protect cohesion and farm funding clashed with leaders pressing for cuts.
- With a delay denied, Italy flagged the option of seeking temporary national exceptions like the 2023 Iberian measure and the Commission’s reassessment will be the key next step that could lead to targeted technical changes before 2028.