Carbon leakage myth buster GERMANY

The document analyzes how German energy-intensive industries generated €4.5 billion in windfall profits from the EU ETS between 2008 and 2014 due to free emission allowances intended to prevent carbon leakage. It highlights that the German government missed out on €29.7 billion in auctioning revenues during this period. The brief identifies the iron and steel, refineries, cement, and petrochemicals sectors as the primary beneficiaries, specifically naming ThyssenKrupp and ArcelorMittal as top earners. It concludes that these subsidies reduce incentives for decarbonization and recommends phasing out free allocations in favor of auctioning to fund climate innovation.

• Energy-intensive companies in Germany generated approximately €4.5 billion in windfall profits from the EU ETS between 2008 and 2014. These profits were derived from three sources: selling surplus allowances (€1,121 million), using lower-priced international offsets (€187 million), and passing costs through to customers (€3,191 million).
• The iron and steel sector was the most profitable beneficiary of the EU ETS in Germany. Specific companies that realized the highest profits include ThyssenKrupp (€673 million), ArcelorMittal (€585 million), Hüttenwerke (€389 million), and Rogesa (€277 million).
• The German government experienced a significant loss in potential revenue due to the free allocation of pollution permits. Between 2008 and 2014, 2.4 billion allowances were given for free, resulting in a loss of at least €29.7 billion in auctioning revenues.
• The document argues that the 'carbon leakage' justification is unsubstantiated, noting that some companies claimed the EU ETS harmed their competitiveness while simultaneously earning hundreds of millions of euros from it. It further asserts that the Paris agreement will mitigate leakage risks after 2020 by creating a more level global playing field.

APA

Carbon Market Watch (2016). Carbon leakage myth buster GERMANY. https://carbonmarketwatch.org/wp-content/uploads/2016/03/Carbon-leakage-myth-buster_Germany_WEB-1.pdf

Chicago

Carbon Market Watch. Carbon leakage myth buster GERMANY. 2016. https://carbonmarketwatch.org/wp-content/uploads/2016/03/Carbon-leakage-myth-buster_Germany_WEB-1.pdf.

Wikipedia

{{cite report |author=Carbon Market Watch |title=Carbon leakage myth buster GERMANY |date=March 2016 |url=https://carbonmarketwatch.org/wp-content/uploads/2016/03/Carbon-leakage-myth-buster_Germany_WEB-1.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{carbonmarketwatch2016carbon, author = {{Carbon Market Watch}}, title = {{Carbon leakage myth buster GERMANY}}, institution = {Carbon Market Watch}, year = {2016}, month = mar, url = {https://carbonmarketwatch.org/wp-content/uploads/2016/03/Carbon-leakage-myth-buster_Germany_WEB-1.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }