Industry windfall profits from Europe’s carbon market 2008-2015

Between 2008 and 2015, heavy industry in 20 European countries generated over €25 billion in windfall profits from the EU ETS. These profits were primarily driven by the free allocation of emission allowances intended to prevent "carbon leakage," a phenomenon the report argues is unsubstantiated by evidence. The most significant gains came from cost-pass through to customers (€16.8 billion), followed by the sale of surplus allowances (€7.5 billion) and the use of cheaper international offsets (€0.8 billion). The iron and steel, cement, refineries, and petrochemicals sectors were the primary beneficiaries. The report concludes that these subsidies reduce the incentive for industrial decarbonisation and deprive governments of an estimated €143 billion in potential auctioning revenues, recommending a phase-out of free allocations and the establishment of a Just Transition Fund.

• Heavy industry across 20 European countries generated more than €25 billion in windfall profits from the EU ETS between 2008 and 2015.
• Windfall profits were derived from three primary sources: cost-pass through to customers (€16.8 billion), selling surplus free allowances (€7.5 billion), and utilizing cheaper international offsets (€0.8 billion).
• The iron and steel, cement, refineries, and petrochemicals sectors were the most profitable; the cement sector specifically earned nearly €3 billion by selling surplus free allowances.
• The highest total windfall profits were recorded in Germany (€4.7 billion), the United Kingdom (€3.2 billion), Spain (€3.0 billion), France (€2.9 billion), and Italy (€2.4 billion).
• Governments missed out on at least €143 billion in auctioning revenues between 2008 and 2015 by granting 11.8 billion free pollution permits.
• The report argues that "carbon leakage"—the relocation of production to countries with weaker climate policies—is a myth, citing a 2013 European Commission study that found no evidence of such relocation due to the EU ETS.
• Free allocation of allowances is claimed to stall emission reductions by reducing the incentive for companies to invest in efficiency or breakthrough technologies, with industrial emissions not projected to decrease until 2030.
• Specific corporate claims regarding competitiveness risks were contradicted by their own financial reports; for example, ArcelorMittal made over €540 million from the EU ETS between 2009-2014 and Lafarge made €712 million between 2008-2014.

APA

Carbon Market Watch (2016). Industry windfall profits from Europe’s carbon market 2008-2015. https://carbonmarketwatch.org/wp-content/uploads/2016/11/CMW-Industry-windfall-profits-from-EUs-carbon-market-2008_2015.pdf

Chicago

Carbon Market Watch. Industry windfall profits from Europe’s carbon market 2008-2015. 2016. https://carbonmarketwatch.org/wp-content/uploads/2016/11/CMW-Industry-windfall-profits-from-EUs-carbon-market-2008_2015.pdf.

Wikipedia

{{cite report |author=Carbon Market Watch |title=Industry windfall profits from Europe’s carbon market 2008-2015 |date=November 2016 |url=https://carbonmarketwatch.org/wp-content/uploads/2016/11/CMW-Industry-windfall-profits-from-EUs-carbon-market-2008_2015.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{carbonmarketwatch2016industry, author = {{Carbon Market Watch}}, title = {{Industry windfall profits from Europe’s carbon market 2008-2015}}, institution = {Carbon Market Watch}, year = {2016}, month = nov, url = {https://carbonmarketwatch.org/wp-content/uploads/2016/11/CMW-Industry-windfall-profits-from-EUs-carbon-market-2008_2015.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }