Search
Close this search box.

Industrial and power decarbonisation

The industrial and power sector have enormous carbon footprints. Nearly two-fifths of global emissions are caused by electricity and heat generation, while energy-intensive industries account for a quarter of global emissions.

The combined effects of these highly polluting sectors is detrimental to the climate and to public health. Moreover, continued high emissions from these sectors undermines the ‘polluter pays’ principle. 

Pricing carbon emissions for power generation and heavy industry can prod these sectors to decarbonise more rapidly. It also helps ensure that polluters pay for the environmental and societal cost of their pollution, which can then be reinvested in climate action and facilitating a fair transition.

A growing number of countries, regions and blocs are imposing a carbon price on the industrial and power sectors through systems that limit overall emissions but allow companies to trade their savings (cap and trade systems) or through carbon taxes. However, most carbon prices around the world are too low to reduce emissions fast enough to limit global warming to safer levels.

What is CMW doing about it?

When it comes to industrial and power decarbonisation, Carbon Market Watch focuses on:

  • Monitoring policy developments and presenting policy recommendations related to cap-and-trade systems and carbon taxation
  • Assessing sectoral decarbonisation efforts and presenting heavy industry and the energy sectors with recommended policies and pathways to decarbonisation
  • Advocating the effective application of the ‘polluter pays’ principle 
  • Monitoring subsidies granted to heavily polluting sectors
  • Assessing if revenues from carbon pricing mechanisms are invested wisely and effectively

“Limiting global temperature rises and meeting the Paris Agreement targets requires the rapid decarbonisation of the entire economy. Unfortunately, there are far too many laggards. Carbon pricing needs to be harmonised in a way that encourages industry to slash its emissions.”

Sam Van den plas

Policy director

“Limiting global temperature rises and meeting the Paris Agreement targets requires the rapid decarbonisation of the entire economy. Unfortunately, there are far too many laggards. Carbon pricing needs to be harmonised in a way that encourages industry to slash its emissions.”

Sam Van den plas

Policy director

Latest

Highlighted

The 2040 homestretch: Enhancing EU climate action before and after 2030 – the role of the EU ETS and carbon removals
This policy document outlines recommendations for how the EU's Emissions Trading System (EU ETS) EU can help the EU decarbonise its economy by 2040. It was submitted in response to the European Commission's public consultation on the EU climate target for 2040.  In order to achieve this 2040 goal, the EU needs to raise its ambition now, not after 2030. Even though the ‘Fit for 55’ package of policy measures was only agreed at the end of 2022, it has one fundamental flaw which undermines its ability to deliver on the EU’s climate goals for this decade: it aims for a net decrease in emissions of at least 55% by 2030, at a time when the science clearly shows we need gross cuts of at least 65%. ‘Fit for 55’ needs to become ‘Fit for 65’ as soon as possible. The EU has run up a serious carbon deficit, this urgently requires the wise allocation of our remaining budget.

Carbon pricing needs to be harmonised in a way that encourages industry to slash its emissions.

Contact our experts

Sam Van den plas
Policy Director

sam.vandenplas[at]carbonmarketwatch.org

Lidia Tamellini
Expert on EU Industrial Decarbonisation

lidia.tamellini[at]carbonmarketwatch.org

Eleanor Scott
Expert on EU Carbon Markets

eleanor.scott[at]carbonmarketwatch.org

Related Topics

Join our mailing list

Stay in touch and receive our monthly newsletter, campaign updates, event invites and more.