European Building Materials: Gearing up for the ETS Review

Research evidence excerpt

European Building Materials: Gearing up for the ETS Review

Global Research

16 July 2026ab

European Building Materials Equities

Europe including UKGearing up for the ETS Review

Building Materials

Julian Radlinger, CFA

The long-awaited 'ETS Review' will take place tomorrow Analyst

The European Commission (EC) will publish its official legislative ETS reform proposals julian.radlinger@ubs.com

tomorrow. The significance of these proposals is that while they likely won't put an end +44-20-7901 6558

to continued political noise around the future of the ETS entirely, they should at least Charles Fruitiere

reduce the level of uncertainty around how the regulation could evolve in coming Analyst

years: the EC's reform proposals, which have remained in flux in recent months and charles.fruitiere@ubs.com

reported several times with ongoing changes, will be final, and will then be debated +44-20-7567 4123

(and adjusted) by the European Council and member states. We outline the key watch- Alisa Dudchak

points below and their relevance for heavyside stocks, and point to recent reports we've Analyst

written on the topic here and here. The documentation is likely to be published on the alisa.dudchak@ubs.com

EC website under press releases or the Climate Action section. +44-20-7567 0844

Which part of the reform proposals are most relevant for cement?

The most relevant potential changes will be to (1) the free allowance phase-out,

(2) the industry benchmarks, (3) the so-called Investment Booster, and (4) the

market stability reserve (MSR) and linear reduction factor (LFR). Points (1) and (2)

are directly relevant to how many free allowances cement (and other industrial)

companies will receive in coming years, and how big an advantage companies will