Germany formally placed industrial competitiveness at the centre of the upcoming EU ETS revision this week, making explicit what had been implicit in Berlin's position: that international carbon credits under Article 6 of the Paris Agreement should be permitted as a compliance and market-stabilisation tool within the EU's flagship carbon market.
Germany's proposals include revising free-allowance benchmarks to better reflect the industrial transition, slowing the pace of allowance phase-outs through the 2030s to prevent price spikes, and allowing Article 6 credits — including those from direct air capture and other permanent removal technologies — to be used within the Market Stability Reserve as an intervention buffer.
The European Commission is due to publish its formal ETS revision legislative proposal in July 2026, aligned to the EU's new 2040 climate target of -90% versus 1990 levels. A leaked internal EU document dated 23 April reveals the bloc is now targeting a final inter-institutional deal between the Parliament and Council by Q1 2027.
The Commission's broader review also covers potential scope expansion to municipal waste incineration from 2028, integration of carbon dioxide removals certified under the Carbon Removal Certification Framework, and carbon leakage provisions for sectors outside CBAM's current coverage.
At TrustVal, we view Germany's Article 6 integration proposal as the most consequential carbon policy development of the year. EU compliance buyers operate at a scale that voluntary market buyers simply cannot match — and the prospect of Article 6.2 ITMOs accessing this demand pool would fundamentally reprice high-quality international credits. Project developers with active bilateral treaty pipelines in Switzerland, Germany, Japan, or other Annex I countries should begin mapping their projects' ITMO eligibility now. TrustVal's advisory team is tracking this legislative process in real time.
Bloomberg — EU Aims for Carbon Market Reform Deal in Early 2027 | European Parliament — ETS Revision Briefing 2026
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