Post EU ETS review: Slower carbon-cost growth, greater rewards for decarbonisation; Buy Holcim, Heidelberg

Research evidence excerpt

Post EU ETS review: Slower carbon-cost growth, greater rewards for decarbonisation; Buy Holcim, Heidelberg

Equity Research

20 July 2026 | 5:28AM BST

EUROPE HEAVYSIDE MATERIALS

Post EU ETS review: Slower carbon-cost growth, greater rewards for

decarbonisation; Buy Holcim, Heidelberg

On 17 July, the European Commission released its review of the Emissions Trading Ben Rada Martin

+44(20)7051-0800 |

System (ETS). The proposal confirms a more industry-supportive framework beyond ben.radamartin@gs.com

Goldman Sachs International

2030, slowing the growth in carbon costs while increasing support for industrial

Natasha Phillipsdecarbonisation. We see mixed implications for decarbonisation leaders in our +44(20)7051-4705 |

coverage (Holcim, Heidelberg). While a slower rise in carbon costs reduces the natasha.phillips@gs.comGoldman Sachs International

relative value of their cost advantage, new funding mechanisms and Patrick Creuset

investment-linked free allocation should disproportionately benefit companies +33(1)4212-1380patrick.creuset@gs.com|

already investing in decarbonisation. For Buzzi, the key risk is retaining allocation if GoldmanBranch Sachs Bank Europe SE - Paris

future investment intensity remains below peers. Key points:

Investment-linked free allocation supports those investing in decarbonisation

(positive): From 2031, free allowances will increasingly be linked to decarbonisation

plans and investment. We view HEIG and HOLN as best positioned to retain free

allocation, while laggards could see 15-80% lower 2031 EBITDA/t if they fail to meet

the new requirements.

Carbon-cost pressure rises more slowly (negative for leaders): A slower

phase-out of allowances and lower ETS scarcity should reduce carbon-cost pressure

across the industry.