Today, the European Commission published its long-awaited proposal to revise the EU Emissions Trading System (ETS), a cornerstone of Europe’s climate policy. While trade unions acknowledge the urgency of decarbonising society, including industry, they warn that the ETS must not become a driver of deindustrialisation. Instead, it should be a predictable and stable instrument that incentivises emission reductions while safeguarding industrial capacity and quality jobs in Europe. The Commission’s stated ambition to turn the EU ETS into an instrument for investment in decarbonisation and reindustrialisation is a positive signal, but the devil is in the details, and workers’ expectations are high.
A predictable carbon price: Stability and transparency over speculation and opacity
The ETS must deliver a carbon price that is both ambitious and predictable, ensuring that industries can plan long-term investments in low-carbon technologies and products. Market speculation and volatile price spikes, as well as rigid theoretical price trajectories, risk undermining the very industries the ETS aims to transform. Trade unions urge the Commission to anchor the carbon price in reality, rewarding front-runners in decarbonisation while protecting those still in transition due to sectoral and regional challenges.
To restore trust, the EU must increase transparency in the governance of the ETS. IndustriAll Europe has proposed establishing an Industrial Decarbonisation Observatory, involving trade unions, to monitor progress and adjust the ETS architecture based on evidence-based assessments of the challenges industries face in their decarbonisation efforts.
Carbon removals and international credits may provide a solution for addressing residual emissions in hard-to-abate industries and help deliver long-term predictability for these sectors. If international credits are to play a role in the EU climate architecture, industriAll Europe insists that their use must be fully aligned with the UN Sustainable Development Goals. It opposes the inclusion of international credits generated by industrial projects outside Europe. The EU ETS must incentivise low-carbon investment in Europe’s industrial base and must not create incentives for investment leakage.
The ETS is a means to an end, not an end in itself. It must be embedded within a broader industrial policy framework that aligns climate ambition with economic resilience, infrastructure development and the uptake of low-carbon products. Likewise, industrial decarbonisation requires an energy policy that secures adequate volumes of decarbonised electricity at competitive prices.
ETS revenues: Fuel for industrial decarbonisation
Current ETS auction revenues - €43 billion in 2025 alone - represent a missed opportunity. Trade unions have long demanded that at least 50% of national ETS revenues be earmarked for industrial decarbonisation projects, up from the current 5%, and have been heard by the Commission. The Innovation Fund and the Modernisation Fund must be reinforced, with strict social and environmental conditionalities to ensure that these resources translate into quality jobs, skills development and long-term investments across Europe.
Private companies also have a crucial role to play in financing the transition. Too many transformative investments have been postponed or withdrawn due to corporate short-termism. Strengthening the conditionalities attached to the allocation of free allowances is therefore a positive development. European companies must stop prioritising shareholder payouts over the future of our industries. The ETUC’s latest study shows that financialisation is starving Europe of the investment it needs to lead the green transition. It is time for profits to be reinvested in our factories, our workers and our climate goals. Blank cheques must stop: whenever companies receive public support, including through free allowances, there must be clear societal co-benefits.
"Climate ambition cannot come at the cost of Europe’s industrial future. The ETS revision is a real test: can the EU decarbonise without deindustrialising at the expense of millions of workers?" said Judith Kirton-Darling, General Secretary of industriAll Europe. "Trade unions are ready to work with policymakers to ensure the answer is yes."
Trade unions also stress that the ETS cannot deliver industrial decarbonisation on its own. It must be accompanied by a comprehensive industrial policy that supports investment, strengthens clean energy infrastructure, creates markets for low-carbon products and ensures a just transition for workers.
"The ETS is a tool for transformation, not a weapon against our industries," concluded Judith Kirton-Darling, General Secretary of industriAll Europe. "We need a system that drives emission cuts while securing jobs and shared prosperity. That means predictable prices, targeted use of ETS revenues and transparent governance - all within a broader industrial policy that leaves no worker behind."
Trade unions urge Members of the European Parliament, Member States and the European Commission to seize this revision as an opportunity to align climate policy with industrial realities and Just Transition principles. The time for half-measures is over. Europe’s green transition must be just, or it will not be sustainable.