Response to impact assessment of the carbon leakage list for the period 2021-2030
The assessment of the carbon leakage list for the post-2020 period will need to be informed by the performance of the carbon leakage provisions to date. So far, the excessively generous handout of free permits has resulted in over 25 billion euros windfall profits (e.g. the polluter has been paid, rather than having been made to pay) and in a standstill of industrial emissions for the past five years with no foreseen emission cuts in the coming decade. There has moreover been an absence of evidence of any carbon leakage occurrences in previous phases.
Under the reform of the EU Emissions Trading System (EU ETS) for the post-2020 period, the free allocation approach will be prolonged which means that heavy industry is set to receive free pollution permits worth up to EUR 170 billion over the next decade.
In this context, Carbon Market Watch believes that the current revision of the EU Emissions Trading System (EU ETS) for the post-2020 period will fail to make the EU ETS a viable instrument to decarbonise European industry. An industrial decarbonisation strategy and a genuine reform of the EU ETS in light of the Paris climate goals are hence urgently needed to bring Europe’s industry at the forefront of the global low-carbon transition and guarantee its long-term competitiveness.
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