Open letter to ITRE committee: time to vote for an EU Emissions Trading System (ETS) that works for climate and industrial transformation

Carbon Market Watch and several partner organisations call for the immediate phase-out of free EU ETS allowances, arguing they create market failures and hinder industrial transformation. The letter advocates for full auctioning of allowances to generate revenues for green investments, the removal of free allocations for sectors covered by the Carbon Border Adjustment Mechanism (CBAM), and the rejection of a Carbon Leakage Protection Reserve. It further proposes increasing the minimum annual benchmark reduction rate to 1% and integrating carbon pricing into a broader regulatory framework including pollution performance standards and green public procurement.

• Free allocation of EU ETS allowances is described as a market failure that discourages emission reductions in the industry and aviation sectors and has slowed industrial decarbonisation.
• Between 2013 and 2019, free allowances resulted in windfall profits of EUR 50 billion for resource- and energy-intensive industries with minimal emission reductions.
• The document argues that removing free allowances for sectors covered by the Carbon Border Adjustment Mechanism (CBAM) would lead to a 15% increase in emission reductions compared to the baseline scenario and a net global reduction in emissions.
• The authors recommend increasing the minimum annual reduction rate of benchmarks to 1% and revising these benchmarks before 2026.
• The letter opposes the creation of a Carbon Leakage Protection Reserve, stating it would compromise industrial transformation and damage the EU's international reputation.

APA

Carbon Market Watch (n.d.). Open letter to ITRE committee: time to vote for an EU Emissions Trading System (ETS) that works for climate and industrial transformation. https://carbonmarketwatch.org/wp-content/uploads/2022/04/FINAL_Open-letter-to-ITRE_-Free-allowances_13042022-1.pdf

Chicago

Carbon Market Watch. Open letter to ITRE committee: time to vote for an EU Emissions Trading System (ETS) that works for climate and industrial transformation. n.d. https://carbonmarketwatch.org/wp-content/uploads/2022/04/FINAL_Open-letter-to-ITRE_-Free-allowances_13042022-1.pdf.

Wikipedia

{{cite press release |author=Carbon Market Watch |title=Open letter to ITRE committee: time to vote for an EU Emissions Trading System (ETS) that works for climate and industrial transformation |url=https://carbonmarketwatch.org/wp-content/uploads/2022/04/FINAL_Open-letter-to-ITRE_-Free-allowances_13042022-1.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{carbonmarketwatchndopen, author = {{Carbon Market Watch}}, title = {{Open letter to ITRE committee: time to vote for an EU Emissions Trading System (ETS) that works for climate and industrial transformation}}, publisher = {Carbon Market Watch}, url = {https://carbonmarketwatch.org/wp-content/uploads/2022/04/FINAL_Open-letter-to-ITRE_-Free-allowances_13042022-1.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }