EU carbon overhaul could reward polluters over early movers, industrial firms warn

Industrial leaders like SSAB, Heidelberg Materials, and Rockwool are warning that the EU's planned overhaul of the Emissions Trading System may end up helping heavy polluters instead of rewarding early low-carbon investors. SSAB is spending 6 billion euros to switch from coal to hydrogen, but fears that softer free permit allocations or slower phase outs could erode the competitive edge of companies that already invested. The European Commission is set to publish its formal ETS review on July 15, 2026, amid political pressure from member states like Italy and Poland who argue the green agenda hurts competitiveness. Carbon prices have risen from under 10 euros in the 2010s to around 80 euros per ton today, which helped justify large scale clean tech investments. But firms like BASF and ArcelorMittal warn that further cost escalation without global alignment makes deeper cuts uneconomic. Investors like Schroders say policy flip flops make it hard to allocate capital confidently. The core tension is whether the EU will hold the line on carbon pricing or soften it under political pressure, potentially rewarding laggards over early movers.