Including consumption in the EU ETS – Administrative implementation of a consumption based charge

The document outlines a proposal to introduce a 'Charge' for carbon-intensive goods, such as steel and clinker, based on the EU ETS permit price and Best Available Technology (BAT) benchmarks. Drawing on the European excise system, it suggests a 'Production Sphere' where registered 'Carbon Keepers' and 'Carbon Warehouses' can handle goods under duty suspension, and a 'Consumption Sphere' where the charge is triggered upon sale to unregistered entities or final consumers. The report recommends a Carbon Monitoring and Control System (CMCS) for tracking movements and the use of de minimis thresholds for imports based on the ratio of carbon value to product value.

• The proposed consumption-based charge is designed to avoid the need for a unanimous European Council vote required for environmental taxes by ensuring it is not a tax, but a non-fiscal charge linked to the EU ETS.
• The scheme focuses on specific carbon-intensive commodities, specifically steel and clinker for cement, because they are produced by a small number of large plants, allowing for high CO2 coverage with low administrative costs.
• A 'Production Sphere' is established where licensed 'Carbon Keepers' and 'Carbon Warehouses' can produce, process, and trade goods without triggering the charge through duty suspension arrangements.
• The charge is triggered when a product enters the 'Consumption Sphere', which occurs when it is exported, sold to an unregistered entity, transferred to a final consumer, or wasted/used as equipment during production.
• The calculation of the charge is based on three factors: the weight of the carbon-intensive good, the European Best Available Technology (BAT) benchmarks, and the average EU ETS permit price from the preceding quarter.
• To minimize administrative burdens, de minimis thresholds should be applied to imports where the ratio of the carbon content's value to the product's total value is low, with the list of relevant product categories updated every five years.
• The report recommends the creation of a Carbon Monitoring and Control System (CMCS), modeled after the European excise EMCS, to track the movement of duty-suspended goods and ensure liabilities are correctly acquitted.
• Licensing for Carbon Keepers should be contingent on minimum accounting standards, compliance with other fiscal obligations (VAT, customs, direct taxation), and the provision of guarantees to mitigate financial risks.
• Scrap metal would be excluded from the scheme to avoid liabilities on importation or exportation, though it would create a new liability if melted to produce hot rolled steel.

APA

Acworth, W., Haussner, M., Ismer, R., & Neuhoff, K. (2014). Including consumption in the EU ETS – Administrative implementation of a consumption based charge. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2016/01/Including-consumption-in-the-EU-ETS-For-comment-30092014.pdf

Chicago

Acworth, William, Manuel Haussner, Roland Ismer, and Karsten Neuhoff. Including consumption in the EU ETS – Administrative implementation of a consumption based charge. Climate Strategies, 2014. https://climatestrategies.org/wp-content/uploads/2016/01/Including-consumption-in-the-EU-ETS-For-comment-30092014.pdf.

Wikipedia

{{cite report |last1=Acworth |first1=William |last2=Haussner |first2=Manuel |last3=Ismer |first3=Roland |last4=Neuhoff |first4=Karsten |title=Including consumption in the EU ETS – Administrative implementation of a consumption based charge |publisher=Climate Strategies |date=September 2014 |url=https://climatestrategies.org/wp-content/uploads/2016/01/Including-consumption-in-the-EU-ETS-For-comment-30092014.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{acworth2014including, author = {Acworth, William and Haussner, Manuel and Ismer, Roland and Neuhoff, Karsten}, title = {{Including consumption in the EU ETS – Administrative implementation of a consumption based charge}}, institution = {Climate Strategies}, year = {2014}, month = sep, url = {https://climatestrategies.org/wp-content/uploads/2016/01/Including-consumption-in-the-EU-ETS-For-comment-30092014.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }