Carbon leakage myth buster

The document analyzes the financial impact of 'carbon leakage' rules within the EU ETS in the Netherlands from 2008 to 2014. It finds that energy-intensive industries generated over €1 billion in windfall profits through surplus allowances, offsets, and cost-pass through to customers. Specifically, Tata Steel, Shell, and Chemelot are identified as major beneficiaries. The brief highlights that the Dutch government missed out on at least €6.4 billion in auctioning revenues due to free allocations, which it argues reduces incentives for industrial decarbonization. It recommends phasing out free allocations, introducing a tiered approach to carbon leakage, and increasing investments in climate-friendly innovation.

• Energy-intensive companies in the Netherlands generated more than €1 billion in windfall profits from the EU ETS between 2008 and 2014. These profits were derived from three primary sources: €819 million from cost-pass through to customers, €236 million from selling surplus emission allowances, and €27 million from using lower-priced international offsets.
• Specific corporations in the Netherlands significantly profited from the carbon market, with Tata Steel earning over €300 million, Shell over €200 million, and Chemelot €90 million.
• The Dutch government lost at least €6.4 billion in potential auctioning revenues between 2008 and 2014 because 533 million pollution permits were allocated for free to industry.
• The document asserts that free emission allowances reduce the incentive for companies to invest in breakthrough technologies or improve efficiency, potentially stalling industrial emission reductions for the next 15 years.
• The brief argues that the risk of carbon leakage is unsubstantiated and will be further mitigated after 2020 as the Paris agreement creates a more level global playing field with similar climate policies.

APA

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

Chicago

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

Wikipedia

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

BibTeX

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