During the second half of 2026, the focus will be on negotiating and concluding central pieces of legislation, aiming to reconcile energy security with decarbonisation. The need to secure agreements is ever more pressing in light of the continuing instability in the Middle East. From the Grids Package to the ETS review, the difficult task at hand is balancing competitiveness with climate ambitions. Key initiatives are awaited by the end of the year to cement the EU’s energy and climate policy for the decade ahead.
Grids and system planning
The European Grids Package will be one of the most important energy files during the remainder of the year. Presented by the Commission in December 2025, the package combines a revision of the TEN-E framework with a proposal to accelerate permitting for grids, renewables, storage, and related infrastructure.
The Council adopted its position on the package in June, while the Parliament adopted its position on the Permitting initiative in July and is yet to secure its position on the TEN-E proposal in September. Both co-legislators have identified the proposals as a priority under the One Europe, One Market roadmap and aim to move towards a final deal before the end of the year, with several trilogue dates already pencilled in.
Industrial Accelerator Act
The Industrial Accelerator Act (IAA), proposed by the Commission in March, will be another major negotiation during the second half of 2026 with an accelerated timetable foreseen. The proposal seeks simultaneously to increase European manufacturing capacity and accelerate industrial decarbonisation, particularly in energy-intensive industries, net-zero technology manufacturing, and the automotive sector. One of the key issues remains the definition of “Made in Europe”, with disagreements both in Council and Parliament.
An agreement between the co-legislators is not in sight for the remainder of 2026 due to persisting divergences and given that the file is closely tied to two transport initiatives (CO2 emissions for cars and Clean Corporate Fleets). However, trilogues may start as soon as Q1 2027 if the Council and Parliament secure their negotiating positions by the end of the year as intended.
The Emissions Trading System nexus
The Commission dropped on 17 July one of the most important reviews in climate policy, that of the Emissions Trading System (ETS), including a total of three proposals. The review is intended to align the carbon market more closely with the EU’s newly agreed 2040 climate target, while providing stronger incentives and financial support for industrial decarbonisation. The package also updates free-allocation and CBAM-related rules, strengthens provisions covering aviation and maritime transport, and gradually extends emissions trading to municipal waste incineration. Earlier in the year, the Commission also proposed new benchmarks for free allocation for 2026–2030, under which industry would continue receiving allowances covering around 75% of its emissions.
The review is one of the central climate policy debates during the remainder of 2026 and into 2027. The rapporteurs have been assigned in Parliament, and the Council will start work in September, thus pointing to 2027, at the earliest, for interinstitutional talks.
Energy security
Energy security has returned to the immediate political agenda following the conflict in the Middle East in February 2026. The Energy Union Task Force is still regularly assessing oil and gas security and developments in the Middle East, showcasing the unwavering nature of the issue.
For the remainder of 2026, much will depend on the developments in global oil and LNG markets. A further deterioration in the Middle East could push affordability and security of supply ahead of other energy priorities and increase political pressure for temporary consumer or industrial support. A file to watch will be the forthcoming Energy Security Package. Ireland has explicitly committed to advancing it during its Presidency, with a particular focus on resilient energy infrastructure, security of supply, and reducing dependence on fossil fuel imports.
Climate framework and resilience
The defining legislation of the European Green Deal will resurface as a stepping stone to the implementation of the EU’s 2040 climate framework, which will create a web of revisions. The European Climate Law was amended in 2025 to establish a legally binding 90% headline reduction in emissions by 2040 compared with 1990, comprising an 85% domestic reduction and the possibility of using international credits for up to five percentage points. Several initiatives are expected to clarify how the post-2030 framework will look for renewable energy, energy efficiency, governance, carbon removals and carbon farming, land-use, and the Energy Union. The proposals are expected in Q4 2026.
Climate resilience will also move higher up the agenda following another summer marked by heatwaves and wildfires. The Commission plans to adopt a new European Climate Resilience and Risk Management framework during the second half of 2026, aimed at strengthening preparedness and embedding climate-risk considerations more systematically across EU and national policy.
The 31st United Nations Climate Change Conference will take place in Antalya between 9 and 20 November 2026. The Council will set the EU’s negotiating position during the October Environment Council, drawing on the Parliament’s resolution that still needs to be endorsed by the Plenary.
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