21 September 2026 – Brussels cannot levy taxes, so it calls them “own resources”. Now the Commission wants 30 per cent of ETS revenues and 75 per cent of CBAM revenues for the EU budget: around €11 billion a year currently paid into national coffers or by European importers. No new money is created. Brussels simply wants a larger share of it. Could Italy block the plan? Meanwhile, India appears to have negotiated itself into a significantly worse position on EU steel quotas.
EU Own Resources: Brussels Wants to Reach Into Other People’s Coffers
The EU cannot levy taxes. So it calls them “own resources”. The distinction is largely linguistic.
For the 2028 to 2034 budget, the Commission wants five new sources of revenue. Two are climate instruments: 30 per cent of ETS revenues and 75 per cent of CBAM revenues are to flow to Brussels, together around €11 billion per year.
Today, the ETS billions go into national budgets. The CBAM bill is paid by European importers, downstream processors and consumers. Brussels is not creating new revenue. It is redirecting existing money.
Costa Wants the Redistribution
European Council President António Costa, after travelling to 25 capitals, has himself identified where the problem lies. An EU levy on something that Member States already tax simply reduces their own revenues.
With tobacco, he recognises this. The same logic applies to emissions trading: every euro from allowance auctions that goes to Brussels in future will be missing in Rome, Warsaw or Berlin. No new money is created. It merely changes address, and with it, control.
Costa’s answer to resistance from the capitals: the pain must be shared. Redistribution could hardly be announced more honestly.
EU Own Resources: Rome Could Use Its Veto
Giorgia Meloni told Costa on 15 September that there would only be a budget without new EU taxes. She did not specifically mention ETS and CBAM. She did not need to.
In March, she described emissions trading in the Senate as a “tax” deliberately imposed by Europe.
Italy could be outvoted on ETS2. Not on the Own Resources Decision. That requires unanimity in the Council and ratification in every Member State.
Rome had already demanded reforms and relief for ETS2 that went beyond simply freezing it until 2028. Poland and other eastern Member States oppose the climate related own resources anyway. And with elections taking place in France, Italy, Spain and Poland in 2027, it becomes clear why the EU is moving quickly on own resources.
CBAM Is Paid for in Europe
If three quarters of CBAM revenue flows into the EU budget, a climate instrument becomes a source of income with its own interest in maintaining a high carbon price. Anyone earning money from certificates has little reason to make them cheaper.
So anyone celebrating CBAM as a shield against imports should know whose coffers they are filling.
A brief note in the direction of Berlin: Dear Chancellor Merz, whilst you speak of reforms that you do not implement, it seems to us that you do not understand the purpose of reforms. Allow us to point, politely, towards Ms Meloni’s approach. Those would be reforms that deliver immediate results. But perhaps we simply have not understood it yet because you have not explained it differently enough.
India’s Steel Quota: Minus 302,000 Tonnes, Sold as a Breakthrough
New Delhi is celebrating once again. The numbers are not. Since 1 July, the EU Steel Regulation has governed market access through quotas. Above those quotas, a 50 per cent tariff applies. Implementing Regulation 2026/1457 currently allocates India 1.94 million tonnes per year.
Now Annex 2 B of the free trade agreement has been published, and it contains only 1.64 million tonnes. The agreement therefore costs India around 302,000 tonnes, a reduction of 15.5 per cent, across all 16 categories. The preferential component shrinks by 29.4 per cent.
The Trade Ministry Presents It as a Success
The Trade Ministry nevertheless presents this as a success, while Indian industry is already doing the calculations and demanding 29 to 35 per cent more. The fact that India has also written the 50 per cent out of quota tariff permanently into the agreement, without any phase out path, is not even mentioned by the government.
India once again appears to have negotiated itself into a worse position and signed up to Brussels’ protectionism at the same time. Anyone selling that as a success should take another look at their own table.
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