How the EU carbon market’s lesser-known cousin could help drive industrial transformation

The author contends that the EU carbon market (ETS) fails to drive industrial decarbonisation because over 90% of industrial emissions are covered by free allowances, leading to stagnating emissions since 2012 and windfall profits for companies. To address this, the document proposes that the upcoming revision of the Industrial Emissions Directive (IED) should remove the explicit exclusion of greenhouse gases (Article 9.1), allowing carbon emission limits to be integrated into environmental permits based on 'best available technology' (BREFs).

• The EU Emissions Trading System (ETS) provides little incentive for energy-intensive industries to decarbonise because more than 90% of industrial greenhouse gas emissions are covered by free allowances, resulting in stagnating industrial carbon emissions since 2012.
• Free emission allowances under the carbon market enabled companies to generate windfall profits exceeding €25 billion between 2008 and 2015.
• The Industrial Emissions Directive (IED) currently excludes greenhouse gases from its scope, which prohibits the inclusion of carbon emission limits in operating permits and restricts member states' ability to promote CO2 reductions.
• Integrating greenhouse gases into the IED would not duplicate ETS regulation because the IED uses a 'best available technology' approach via reference documents (BREFs), whereas the ETS uses a cap-and-trade mechanism.
• To enable this transformation, the European Commission must propose the deletion of Article 9.1 of the IED; a public consultation was scheduled for July 2020, with a revised proposal expected by the end of 2021.

APA

Ruggiero, A. (2020). How the EU carbon market’s lesser-known cousin could help drive industrial transformation. Carbon Market Watch. https://carbonmarketwatch.org/2020/04/29/how-the-eu-carbon-markets-lesser-known-cousin-could-help-drive-industrial-transformation/

Chicago

Ruggiero, Agnese. How the EU carbon market’s lesser-known cousin could help drive industrial transformation. Carbon Market Watch, 2020. https://carbonmarketwatch.org/2020/04/29/how-the-eu-carbon-markets-lesser-known-cousin-could-help-drive-industrial-transformation/.

Wikipedia

{{cite press release |last1=Ruggiero |first1=Agnese |title=How the EU carbon market’s lesser-known cousin could help drive industrial transformation |publisher=Carbon Market Watch |date=29 April 2020 |url=https://carbonmarketwatch.org/2020/04/29/how-the-eu-carbon-markets-lesser-known-cousin-could-help-drive-industrial-transformation/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{ruggiero2020how, author = {Ruggiero, Agnese}, title = {{How the EU carbon market’s lesser-known cousin could help drive industrial transformation}}, publisher = {Carbon Market Watch}, year = {2020}, month = apr, url = {https://carbonmarketwatch.org/2020/04/29/how-the-eu-carbon-markets-lesser-known-cousin-could-help-drive-industrial-transformation/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }