European Cement: ETS Review: delay, not derailment (preview)

Research evidence excerpt

European Cement: ETS Review: delay, not derailment (preview)

Equity Research

30 June 2026

European Cement

ETS Review: delay, not derailment

(preview)

Ahead of the ETS review proposal this July, we outline what HEIG.DE/HEI GY OVERWEIGHT

we expect to see: incremental change rather than structural EuropeanBuilding MaterialsConstruction,& NEUTRAL

reform. Likely extension of free allowances delays pricing but Infrastructure Price Target EUR 243.00

keeps the cement pricing and earnings upcycle intact, with Price (26-Jun-26) EUR 184.40

Potential Upside/Downside +31.8%possible mid-teens upside to 2030. Source: Bloomberg, Barclays Research

In recent months, the European Commission (EC) has been conducting a thorough review of the VCTP.PA/VCT FP OVERWEIGHT

EU Emissions Trading Scheme (ETS), and is expected to publish a proposal to update the policy European Construction,

Building Materials & NEUTRALon 15 July 2026. The review aims to bring the ETS in line with updated EU decarbonisation Infrastructure

targets and to respond to concerns around the impact of the policy on European industrial Price Target EUR 94.00

competitiveness. Price (26-Jun-26) EUR 66.40

Potential Upside/Downside +41.6%

ETS review unlikely to derail our bull case: We expect incremental, not structural, changes to Source: Bloomberg, Barclays Research

the ETS given our view that the EU's commitment to decarbonisation remains intact. As such,

we do not see the review as a material risk to the medium-term pricing and margin expansion HOLN.S/HOLN SW OVERWEIGHT

story for European cement. In our view, a probable extension of free allowances (beyond 2034) European Construction,

and slower phase-out pushes carbon cost pass-through later, making cement price inflation Building Materials & NEUTRAL Infrastructure