EU ETS reform must tighten screws on the number of pollution permits

Carbon Market Watch asserts that the EU ETS is currently ineffective, citing a carbon price drop below €6 per tonne as evidence. The organization calls for a steeper Linear Reduction Factor—suggesting an annual decrease of at least 4.2% to achieve decarbonisation by 2040—and the permanent cancellation of surplus allowances. It further argues that the concept of 'carbon leakage' is unsupported by evidence and that the proposed €160 billion in free pollution permits for heavy industry hinders low-carbon investment and risks creating windfall profits.

• The EU ETS is currently failing to drive emission reductions, as evidenced by the carbon price falling to below €6 per tonne of pollution.
• The current Linear Reduction Factor is insufficient for the 1.5°C goal; to decarbonise power and industry by 2040, emissions would need to decrease by at least 4.2% annually, which is significantly higher than the proposed 2.2% annual reductions.
• The EU ETS has been consistently oversupplied with emission allowances for ten years because targets were set above actual emissions.
• The document claims there is no evidence for 'carbon leakage' (production displacement due to carbon pricing), yet the current proposal suggests providing €160 billion in subsidies to heavy industry via free pollution permits.
• Free allocation of pollution permits reduces the incentive for heavy emitters to invest in efficiency or low-carbon technologies, leading to a European Environment Agency projection that industrial emissions will not decline over the next 15 years.

APA

de Jong, F. (2016). EU ETS reform must tighten screws on the number of pollution permits. Carbon Market Watch. https://carbonmarketwatch.org/2016/02/04/eu-ets-reform-must-tighten-screws-on-the-number-of-pollution-permits/

Chicago

de Jong, Femke. EU ETS reform must tighten screws on the number of pollution permits. Carbon Market Watch, 2016. https://carbonmarketwatch.org/2016/02/04/eu-ets-reform-must-tighten-screws-on-the-number-of-pollution-permits/.

Wikipedia

{{cite press release |last1=de Jong |first1=Femke |title=EU ETS reform must tighten screws on the number of pollution permits |publisher=Carbon Market Watch |date=4 February 2016 |url=https://carbonmarketwatch.org/2016/02/04/eu-ets-reform-must-tighten-screws-on-the-number-of-pollution-permits/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{dejong2016ets, author = {de Jong, Femke}, title = {{EU ETS reform must tighten screws on the number of pollution permits}}, publisher = {Carbon Market Watch}, year = {2016}, month = feb, url = {https://carbonmarketwatch.org/2016/02/04/eu-ets-reform-must-tighten-screws-on-the-number-of-pollution-permits/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }