Finance
Poland's Tusk Presses EU to Keep Giving Industry Free Carbon Permits
Published by Global Banking & Finance Review®
Posted on March 18, 2026
3 min readLast updated: March 18, 2026
Quick Summary
Polish Prime Minister Donald Tusk and fellow leaders from Austria, Belgium, Bulgaria, Italy and Slovakia urge the EU to continue granting free carbon allowances to industry, amid rising energy costs and debates over the phased rollout of ETS2.
Poland and EU Allies Demand Continued Free Carbon Permits Amid Rising Costs
EU Carbon Market Debate and Poland's Position
WARSAW, March 18 (Reuters) - Poland is one of a group of countries pressing for the European Union to keep handing out free carbon permits to industry to help curb costs, Polish Prime Minister Donald Tusk said on Wednesday.
European Union leaders, who meet for a summit in Brussels on Thursday, are debating proposals to modify the bloc's carbon market that have become central to discussions on containing the rise in energy prices linked to the U.S.-Israeli war on Iran.
Joint Letter from EU Member States
Speaking at an energy conference, Tusk said that together with countries including Austria, Belgium, Bulgaria, Italy and Slovakia, Poland had sent a letter to the European Commission to demand industry should continue to receive free carbon allowances that limit their bill for releasing carbon emissions.
Focus on Each Country's Needs
FOCUS ON EACH COUNTRY'S NEEDS?
He said he would also urge the EU to tailor its approach to climate policy to countries' individual needs.
"This is about a change of philosophy, a profound adjustment so that each member state can count on a specific approach that takes into account its specific characteristics," he said.
Background: The EU Emissions Trading System (ETS)
Launched in 2005, the ETS forces power plants and industries to buy permits to cover their CO2 emissions, but manufacturing and energy‑intensive industries can get some allowances for free.
Poland's Reliance on Free Permits
Poland, which still relies on carbon-intensive coal for around half of its electricity, has been particularly dependent on its allocation of free permits to limit costs.
Upcoming Changes: ETS2 and Their Impact
The changes to the carbon trading scheme, known as ETS2, will impose a price on CO2 emissions from heating and transport fuels from 2028, and spend the collected revenues to help households and businesses invest in electric cars and energy-saving renovations.
Opposition to Reforms Amid Global Tensions
The war in the Middle East has intensified the resistance of some governments to the reforms that they say could lead to consumers paying more for energy and want ETS2 further delayed.
Impact on Energy Bills and EU Response
On average, the ETS represents 11% of energy bills in Europe, but this exceeds 20% in countries, such as Poland, with more polluting energy mixes.
The European Commission did not immediately respond to a request for comment.
(Reporting by Alan Charlish, Karol Badohal, additional reporting by Kate Abnett in Brussels; editing by Barbara Lewis)
Key Takeaways
- •Poland, backed by other member states, is pushing the European Commission to maintain free carbon permits for industry to cushion costs.
- •The new ETS2 scheme expanding carbon pricing to transport and heating in 2028 faces resistance due to potential consumer cost impacts.
- •EU reforms aim to phase out free allowances gradually via CBAM and tighter benchmarks, but Poland argues for tailored climate policy reflecting its coal-dependent energy mix and cost burdens.
Frequently Asked Questions about Poland's Tusk presses EU to keep giving industry free carbon permits
1Why is Poland pushing for continued free carbon permits from the EU?
Poland relies on free carbon permits to limit energy costs, especially due to its dependence on carbon-intensive coal power.
2What changes are being proposed to the EU carbon market?
The proposed reforms include modifying the ETS, introducing ETS2, and imposing a carbon price on heating and transport fuels from 2028.
3Which countries are supporting Poland's position on carbon permits?
Austria, Belgium, Bulgaria, Italy, and Slovakia have joined Poland in urging the EU to continue free allowances for industry.
4How does the ETS impact energy bills in Europe?
On average, the ETS accounts for 11% of energy bills, but it can exceed 20% in more carbon-intensive countries like Poland.
5What is ETS2 and when will it be implemented?
ETS2 is an extension of the EU's carbon trading scheme, set to start pricing CO2 emissions from heating and transport fuels in 2028.
