Carbon leakage support for European manufacturing industry

Companies covered by the European Emissions Trading System (EU-ETS) have to match their greenhouse gas emissions with an equal amount of CO2 allowances. These allowances are distributed to companies partly for free and partly via auctions. Companies that face a shortage of free allowances need to purchase additional allowances on the market. Carbon leakage is a term to describe the effect that occurs when carbon emissions outside Europe increase due to carbon costs imposed by carbon policies within Europe; this then leads to the leakage of emissions from Europe to countries without equivalent carbon policies. The carbon leakage status of sectors has a significant and increasing impact on the number of free allowances that companies within these sectors are entitled to and consequently on the ETS-costs for these companies.

Industry sectors are assessed according to EU legislation on their intensity of trade and carbon cost. Sectors meeting a specific threshold are considered to be ‘exposed’ to a significant risk of carbon leakage which allows all ETS installations in the sector to receive compensation for carbon costs. Some sectors are confronted with difficulties in demonstrating the risk of carbon leakage on their sector. Ecofys has supported a multitude of industry sectors. Support depends on specific issues the sector encounters, and can range from making a clear definition of the relevant subsector to be used in the assessment, to establishing a detailed industry data set on energy and carbon and financial indicators to demonstrate the carbon cost intensity of the industry.

Learn more about some of the sectoral organisations we already supported:

EUPPA – European Potato Processors‘ Association 

ECGA – European Carbon and Graphite Association

EuSalt – European Salt Producers‘ Association

FEDIOL - The EU Vegetable Oil and Proteinmeal Industry

EWPA – European Whey Products Association

EDA – European Dairy Association

ETRMA – European Tyre & Rubber Manufacturers’ Association

Contact

Martijn Overgaag
Sustainable Industries and Services
E-mail
Several industry organisations that benefitted from Ecofys' support