The TDMA calls for suspension of the EU ETS heat and fuel fallback benchmarks
The proposed 34.1% cut to the EU ETS fallback benchmarks for heat and fuel is not achievable in the short term, and the consequences for the European titanium dioxide production would be severe. In its response to the European Commission's consultation on the EU ETS benchmarks for 2026–2030, the TDMA calls for the fallback benchmarks to be suspended until they are replaced by a methodology that reflects industrial reality. While the TDMA supports the EU’s decarbonisation objectives, it considers that the proposed fallback benchmark reductions are not achievable in the short-term and will have severe consequences on installations across Europe. This will significantly increase production costs and carbon leakage, with implications for EU competitiveness and supply resilience.
A benchmark cut the industry cannot meet
The European Commission is reviewing EU ETS benchmarks for the 2026–2030 trading period, including a 34.1% reduction in the fallback benchmarks for heat and fuel compared to the 2021-2025 period.
TiO₂ production is energy intensive and does not have a product specific benchmark and therefore free allocation of allowances is mainly based on the heat fallback benchmark. The fallback benchmarks cover very different processes, yet are driven by a limited number of best-case examples that are not widely replicable across installations or regions.
The current proposal for a 34.1% reduction in the EU ETS heat and fuel fallback benchmarks from the 2021-2025 to the 2026-2030 period and the resulting loss of free allocation of allowances would have dire consequences for the production of TiO₂ in the EU.
Unattainable targets will not cut emissions, they will:
- Drive carbon leakage, as production shifts outside the EU to regions with less stringent climate rules, moving emissions rather than reducing them.
- Export production, emissions and investment outside Europe, weakening Europe's supply resilience and strategic autonomy.
- Accelerate plant closures in a sector already under acute energy cost pressure.
What TDMA is asking for?
In its consultation response, TDMA calls on the European Commission to:
- Suspend the revision of EU ETS fallback benchmarks for heat and fuel until the current approach is replaced.
- Develop a methodology that reflects industrial reality, based on the actual EU-wide availability of energy, feedstock, technologies and infrastructure that can realistically be deployed at scale, not theoretical best cases drawn from a handful of installations.
