The EU Emissions Trading System (ETS) currently classifies emissions as either fossil or biogenic, with biogenic emissions zero-rated under the Renewable Energy Directive. However, as the EU moves toward climate neutrality, it’s crucial to recognize a third category: residual emissions. Unlike abatable emissions, residual emissions—such as those from chemical reactions in cement, lime, or metal production—are often unavoidable, even after electrification and sustainable energy use. For example, cement production releases CO₂ during limestone calcination, and metal refining emits CO₂ as part of the process. These emissions persist unless the process itself is replaced or carbon capture is applied. The ETS revision should formally acknowledge residual emissions as a distinct category, ensuring fair treatment and incentivizing targeted decarbonization solutions