The European Emissions Trading System EU ETS remains a key instrument for achieving climate neutrality. However, the European Commission’s proposed ETS1 revision must better reflect the economic and technical realities of industrial decarbonisation. In our position paper we call for free allocation without new conditionalities to maintain effective carbon leakage protection. Realistic benchmarks and predictable market conditions are needed to ensure that climate ambition can go hand in hand with industrial competitiveness and a resilient European economy.