The Tile Crossroads: Can Brussels Be Bent in the CO₂ Battle?
Tile Wars · markets · · Tile Wars
Brussels softens the free CO₂ allowance cut for ceramics to around 20% after pressure from Spain and Italy, rules out a sector-specific benchmark, and forces Member States to reinvest half of ETS auction revenue into industrial decarbonisation.
EU climate policy has entered a phase of maximum tension and industrial realism. As the European Commission moves forward with the review of its Emissions Trading System (ETS) to align it with the 90% reduction target for 2040, southern capitals and tile clusters have waged a war of attrition that has forced Brussels to rewrite, at least in part, its plans. Although the final resolution eases the pressure, it leaves a bittersweet taste in the most exposed sectors. A partial reprieve: Brussels softens the "blow" to 20% The intense diplomatic lobbying carried out by Spain and Italy —led by the letter from Spain's Minister for the Ecological Transition, Sara Aagesen— has partially paid off. The European Commission has finally agreed to soften the drastic cut planned for the free allocation of emission allowances for the 2026-2030 period. The feared initial cut of 34% will be reduced by just over ten points, settling at around 20%. This adjustment provides a partial economic lifeline for the ceramic cluster (whose initial estimates put the extra cost at 160 million euros) and for the frit and glaze industry (with 50 million at stake). The logic has prevailed that forcing a radical cut on a sector that lacks the short-term technological maturity to replace natural gas does not decarbonise, but rather destroys the industrial fabric. The technical rebuff: Germany and France block a sector-specific benchmark However, the victory has not been complete. Brussels has definitively ruled out granting a specific benchmark of its own for ceramics. This was the great technical aspiration of the sector''s trade associations, and it even had the backing of the EU''s own Climate Change Expert Group (CCEG), whose technical report argued that a dedicated indicator would have allowed free emission allowances to be raised by up to 12%, recognising the efficiency effort already made. Despite the political alignment of Madrid and Rome, the bloc formed by powers such as Germany and France ended up blocking this proposal inside the Commission. A missed opportunity that the sector already plans to fight again ahead of the post-2030 review. The flip side: More mandatory funding for decarbonisation The big positive surprise of this reform lies in the funding routes. Brussels has accepted a key proposal to offset the regulatory impact: it will require Member States to allocate at least 50% of the revenue obtained from CO₂ auctions to financing the decarbonisation of the industries trapped in the ETS. Until now, barely 5% of that revenue was returned directly to industry. This regulatory change will force governments to mobilise hundreds of millions of euros to subsidise electrification and energy transition projects in industrial plants. In addition, the creation of a European Bank for Industrial Decarbonisation has been announced, endowed with emission allowances equivalent to some 100 billion euros to support the most energy-intensive sectors. Historical precedents that explain the flexibility This partial U-turn by the European Commission is not an isolated event; it follows in the wake of other major recent industrial battles where the EU has had to balance its climate ambition with socio-economic reality: The combustion engine beyond 2035: The automotive industry, championed by Germany and Italy, managed to break the absolute veto on combustion engines, forcing the EU to accept technological neutrality through synthetic fuels (e-fuels). The fall of the Pesticides Law: Faced with the massive tractor protests that paralysed Brussels, the Commission withdrew the regulation that would have halved chemical pesticides for fear of social unrest and electoral backlash. The brake on aviation levies: The threat of international trade retaliation by the United States and China forced the freezing of the CO₂ market for transoceanic flights to shield European aircraft manufacturers. Next steps in an "insufficient" transition For sector representatives and political spokespeople linked to the cluster, the outcome is still seen as "insufficient and unfair", on the understanding that an industry already operating at the highest possible efficiency levels with current technology continues to be penalised. The ceramic battle shows that Brussels is not entirely impermeable to real-world pressure. The 20% cut hurts, but the obligation to return CO₂ money in the form of massive transition aid opens a new chapter. The tile industry has not managed to bend the Commission''s arm completely, but it has managed to prevent the weight of climate regulation from finally breaking it.