CARBON LEAKAGE FROM THE EU EMISSION TRADING SCHEME: A COMMENT ON THE CEMENT SECTOR

The paper argues that the EU cement sector is more exposed to carbon leakage than generally assumed, particularly in coastal regions. Using two models with a CO2 price of 30 €/t, the author finds that short-term import levels in coastal regions would rise from 13% to 25%, with an overall EU leakage rate of 65%. In the long term, EU cement capacity is projected to decline by 13% as imports become more attractive during peak demand. The author concludes that while output-based allocation might mitigate financial pressure, a severe world recession would likely induce a similar industrial restructuring to that of a full auctioning scheme.

• In the short term, the EU-ETS with full auctioning and a CO2 price of 30 €/t would increase the import rate from non-EU countries from 8% to 18% on average for the EU, with coastal regions seeing an increase from 13% to 25%.
• The associated short-term carbon leakage rate is estimated at 65%, meaning that for every 1 ton of CO2 avoided within the EU, 0.65 tons are emitted outside the EU.
• Full auctioning of CO2 allowances would lead to a decline in the operating profit of EU cement firms by 39% in absolute terms and 28% in relative terms, after restructuring excess capacity.
• In the long term, EU cement capacity is projected to decrease by 13% under a 30 €/t CO2 price; 5% of this decline is attributed to the direct price impact on demand and 8% to changes in relative competitiveness between EU and non-EU production.
• Under long-term scenarios, imports may reach 24% at peak demand levels, and the average leakage rate over the business cycle is estimated at 56%.
• The author suggests that a severe world recession would trigger an industrial restructuring of the European cement industry similar to the effects of a pure full auctioning scheme, as it facilitates the closing of small plants and the adoption of abatements in larger, modern plants.

APA

Ponssard, J.-P. (2008). CARBON LEAKAGE FROM THE EU EMISSION TRADING SCHEME: A COMMENT ON THE CEMENT SECTOR. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2014/11/ponssard-feb-2009-formatted-v2.pdf

Chicago

Ponssard, Jean-Pierre. CARBON LEAKAGE FROM THE EU EMISSION TRADING SCHEME: A COMMENT ON THE CEMENT SECTOR. Climate Strategies, 2008. https://climatestrategies.org/wp-content/uploads/2014/11/ponssard-feb-2009-formatted-v2.pdf.

Wikipedia

{{cite report |last1=Ponssard |first1=Jean-Pierre |title=CARBON LEAKAGE FROM THE EU EMISSION TRADING SCHEME: A COMMENT ON THE CEMENT SECTOR |publisher=Climate Strategies |date=2008 |url=https://climatestrategies.org/wp-content/uploads/2014/11/ponssard-feb-2009-formatted-v2.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ponssard2008carbon, author = {Ponssard, Jean-Pierre}, title = {{CARBON LEAKAGE FROM THE EU EMISSION TRADING SCHEME: A COMMENT ON THE CEMENT SECTOR}}, institution = {Climate Strategies}, year = {2008}, url = {https://climatestrategies.org/wp-content/uploads/2014/11/ponssard-feb-2009-formatted-v2.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }