Carbon Control and Competitiveness Post 2020

The report finds that while the EU ETS initially focused management attention on CO2, a declining carbon price and free allocation rules have since diminished its impact. Most emission reductions were driven by economic cycles or non-ETS regulations. The authors argue that current free allocation creates distortions, such as discouraging asset rationalization and incentivizing excess clinker production. To unlock deep mitigation like Carbon Capture and Storage (CCS) and clinker substitution, the report recommends strengthening the carbon price signal, reforming leakage protection through output-based allocation or the inclusion of consumption, and providing targeted innovation support.

• The EU ETS has lost priority among cement company top management due to a carbon price that declined from 30 to 5 €/ton CO2, high volatility, and systemic complexities.
• Most CO2 emission reductions in the EU cement sector were caused by factors other than the EU ETS, primarily a decrease in clinker and cement production resulting from the global financial crisis.
• Carbon intensity of cement improved by 3-5% since 2005, but this progress is largely linked to drivers outside the EU ETS, suggesting the system's insufficiencies.
• There is no evidence of operational or investment leakage caused by the EU ETS; however, free allowance allocation creates severe distortions in the market.
• Activity level requirements in the EU ETS discourage asset rationalization and energy efficiency improvements by incentivizing companies to maintain production at inefficient plants to secure maximum free allocations.
• Carbon costs are not passed through to cement purchasers, which removes economic incentives for customers to choose low-carbon cement types or use cement more efficiently.
• The EU cement sector reduced fuel-related gross CO2 intensity by 6% between 2005 and 2011, primarily by replacing coal with biomass and waste, driven by energy cost reduction rather than the EU ETS.
• Carbon Capture and Storage (CCS) is essential for reaching an 80% emission reduction by 2050, potentially contributing 40% to 60% of total reductions, but it faces high costs (estimated abatement costs of 30 to 40€ per ton CO2) and lacks specific EU member state policies.
• The report proposes two mechanisms to reflect carbon prices in cement prices without causing leakage: shifting to full auctioning combined with the inclusion of importers, or using output-based allocation combined with a consumption charge on clinker content.

APA

Neuhoff, K., Vanderborght, B., Ancygier, A., Atasoy, A. T., Haussner, M., Ismer, R., Mack, B., Ponssard, J.-P., Quirion, P., van Rooij, A., Sabio, N., Sartor, O., Sato, M., & Schopp, A. (2014). Carbon Control and Competitiveness Post 2020. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2016/01/CS-20140226-EII-cement-report-final.pdf

Chicago

Neuhoff, Karsten, Bruno Vanderborght, Andrzej Ancygier, Ayse Tugba Atasoy, Manuel Haussner, Roland Ismer, Benedikt Mack, et al. Carbon Control and Competitiveness Post 2020. Climate Strategies, 2014. https://climatestrategies.org/wp-content/uploads/2016/01/CS-20140226-EII-cement-report-final.pdf.

Wikipedia

{{cite report |last1=Neuhoff |first1=Karsten |last2=Vanderborght |first2=Bruno |last3=Ancygier |first3=Andrzej |last4=Atasoy |first4=Ayse Tugba |last5=Haussner |first5=Manuel |last6=Ismer |first6=Roland |last7=Mack |first7=Benedikt |last8=Ponssard |first8=Jean-Pierre |last9=Quirion |first9=Philippe |display-authors=etal |title=Carbon Control and Competitiveness Post 2020 |publisher=Climate Strategies |date=February 2014 |url=https://climatestrategies.org/wp-content/uploads/2016/01/CS-20140226-EII-cement-report-final.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{neuhoff2014carbon, author = {Neuhoff, Karsten and Vanderborght, Bruno and Ancygier, Andrzej and Atasoy, Ayse Tugba and Haussner, Manuel and Ismer, Roland and Mack, Benedikt and Ponssard, Jean-Pierre and Quirion, Philippe and van Rooij, Arjan and Sabio, Nagore and Sartor, Oliver and Sato, Misato and Schopp, Anne}, title = {{Carbon Control and Competitiveness Post 2020}}, institution = {Climate Strategies}, year = {2014}, month = feb, url = {https://climatestrategies.org/wp-content/uploads/2016/01/CS-20140226-EII-cement-report-final.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }