Dispatch from the European Union | June '26
*** Our weekly Dispatches provide an overview of the most relevant recent and upcoming developments for the shift to climate neutrality in selected European countries, from policy and diplomacy to society and industry. For a bird's-eye view of the country's climate-friendly transition, read the respective 'Guide to'. ***
Stories to watch in the weeks ahead
- Grid Package - EU energy ministers will meet on 26 June to discuss, and possibly reach an agreement on, the EU Grids Package. The aim of the package is to improve cross-border interconnectivity within the EU, boost electrification, and speed up permitting for grids, while also making cross-border infrastructure more secure, according to the European Council, the EU body that represents the 27 EU member states.
- Electrification Plan and ETS - The European Commission will present its Electrification Action Plan and Emissions Trading System (EU ETS) review on 15 July. The Electrification Action Plan sets out a roadmap to reduce the EU’s dependence on fossil fuels by accelerating the shift to domestically produced clean electricity. It targets three sectors that remain heavily reliant on fossil fuels: transport, through the deployment of electric vehicles and charging infrastructure; industry, by supporting the decarbonisation of energy-intensive sectors such as steel and chemicals; and buildings, through the adoption of clean heating and cooling technologies such as heat pumps to replace most existing natural gas-based heating systems.
The proposed revision of the ETS will address the distribution of efforts among member states - covering buildings, transport, agriculture and waste - as well as natural carbon sinks, international carbon credits and the EU’s energy and climate governance, Ruben Vermeeren, deputy head of the carbon markets unit at the European Commission’s DG Climate, said at the presentation of the report “The revision of the EU ETS 1: Challenges and levers” by think tank European Roundtable on Climate Change and Sustainable Transition. - In terms of money… - Ireland will take over the rotating presidency of the Council of the European Union from Cyprus on 1 July for half a year. One of the main objectives of the Irish presidency will be reaching an agreement on the next European budget - known as “MFF” in EU jargon for Multiannual Financial Framework - on the basis of the negotiation box, the key document that structures budget negotiations among member states, prepared by the Cyprus presidency. From the almost two-trillion-euro budget, 35 percent will be dedicated to climate and environment, with around 66 billion euros earmarked for “clean transition and industrial decarbonisation” (figures are in the Annex of the negotiation box document). The presidency rotates among the EU’s member states every six months, with the holder responsible for steering the Council’s legislative agenda and chairing its meetings. The Council of the European Union brings together government ministers from the bloc’s 27 member states and serves as one of the EU’s main law-making bodies.
The latest in EU policymaking – last month in recap
- Provisional agreement on EU carbon market for buildings, road transport and other sectors (ETS2) - The Cyprus Presidency of the Council of the EU and the European Parliament reached a provisional agreement on a revision of the Market Stability Reserve (MSR) linked to the EU Emissions Trading System for buildings, road transport and other sectors (ETS2). They announced that the market stability reserve, designed to balance supply and demand in the new ETS2 carbon market, will be strengthened and extended beyond 2030 to support “a stable and predictable” market ahead of the ETS2’s full launch in 2028.
- Boosting batteries - The European Commission launched a 1.5 billion euro “Battery Booster Facility”, funded by emissions trading revenues, to support the expansion of battery cell production in Europe, marking its first direct intervention in the sector through interest-free loans rather than grants to strengthen capital planning and crowd in private investment. The scheme targets projects producing electric-vehicle-ready battery technology within the EU, with eligibility requiring at least 10 gigawatt-hours of production capacity.
- Electric cars on the rise - Soaring oil prices are boosting electric vehicles across the globe. Europe is poised for the largest growth among major markets, with sales projected to increase by around 20 percent this year, such that one in three cars sold are electric, according to the International Energy Agency (IEA). In the first quarter of this year, fully battery-electric cars reached an EU market share of more than 19 percent, up from 15 percent one year earlier. Hybrid-electric car registrations captured almost 39 percent of the market, while the combined market share of petrol and diesel cars fell to around 30 percent, down from 38 percent at the start of 2025, according to industry association ACEA.
Claire’s picks: Good reads and upcoming publications
- Electrification buzz - With electrification now becoming a buzzword in Brussels, Euronews has this explainer on what exactly electrification is and why the EU is betting on it. Think Tanks E3G and Strategic Perspectives describe here and here what the challenges are, and what it takes for the EU to speed up electrification.
- Solar & batteries – The EU’s electrification drive also shines a spotlight on the future role of solar and batteries. SolarPower Europe will release its Global Solar Market Outlook 2026-2030 on 22 June and its European Battery Storage Market Outlook 2026-2030 on 23 June. One day later, think tank Ember will publish its new report on “Batteries and demand flexibility are ready to scale across the EU”.
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