The Emissions Trading System (ETS) is a centrepiece of the EU’s climate policy and its main tool to reduce greenhouse gas (GHG) emissions from Europe’s industrial and power sectors. Until today, most of the emission reductions achieved under the EU ETS were driven by the power sector due to fuel switches in the production of electricity and heat (i.e. less hard coal and lignite, more renewable energy sources). On the contrary, carbon emissions from sectors like steel, cement and chemicals have barely decreased in the past decade. Yet, the same energy-intensive industries continue to push back on the impending reforms to the EU ETS.
Using position papers and submissions to the European Commission’s public consultations on the topic in 2015 and 2020 from the chemicals, steel and cement sectors, this briefing scrutinises the industry’s claims and talking points, analysing their influence on the processes of past and upcoming revisions of the EU ETS.
- The industry lobby repeats arguments that fall under well-documented ‘discourses of climate delay’. Their main aim has been to divert responsibility by claiming that other sectors or regions should take action first, as well as pushing for non-transformative solutions.
- In the last EU ETS revision, the imbalance of the political influence between the industry lobby and civil society organisations led the majority of EU lawmakers to grant exemptions to energy-intensive industries and undermine the polluters pay principle.
- Despite their current public embrace of ambitious climate policy, energy-intensive industries continue to push back against the implementation of the European Green Deal when it comes to reforms to the EU ETS.
- The industry narrative remains focused on the risk of carbon leakage despite little evidence that it has ever taken place and the demand for free pollution permits. In addition, the economic downturn caused by the COVID-19 pandemic has been used by many industry associations as an argument against phasing out the free allocation of emissions allowances post-2020.