Open letter: Time to agree on an EU Emissions Trading System (ETS) and a Carbon Border Adjustment Mechanism (CBAM) that work for the climate and support industrial transformation

The document argues that the EU Emissions Trading System (ETS) has functioned as a subsidy for high-emitting industries, providing €50 billion in windfall profits while failing to reduce emissions. The authors call for a full phase-out of free allowances by 2032, a 10% annual reduction starting in 2026, and the introduction of a fully operational Carbon Border Adjustment Mechanism (CBAM) by 2026. They further propose making any remaining free allowances conditional on energy efficiency and decarbonisation plans, and revising benchmarks to include a minimum improvement rate of at least 0.4%.

• The authors claim that free ETS allowances have failed to lower emissions in energy-intensive industries and instead acted as a subsidy for incumbents, resulting in €50 billion of windfall profits for the chemicals, cement, and steel sectors.
• The coalition proposes a specific timeline for the removal of free allowances: a 10% annual reduction between 2026 and 2030, with a total discontinuation by 2032 at the latest, alongside a fully operational CBAM starting in 2026.
• The document asserts that current projections for free allowances are overly generous, estimating that the cement sector would receive over €55 billion and the steel sector €80 billion over the next seven years.
• The authors recommend that the allocation of free ETS allowances be made conditional on decarbonisation plans and energy efficiency requirements, and that benchmarks be revised to increase the minimum improvement rate to at least 0.4%.
• Between 2013 and 2021, EU industries received €98.5 billion in free allowances, yet their emissions showed minimal decrease.

APA

Carbon Market Watch (n.d.). Open letter: Time to agree on an EU Emissions Trading System (ETS) and a Carbon Border Adjustment Mechanism (CBAM) that work for the climate and support industrial transformation. https://carbonmarketwatch.org/wp-content/uploads/2022/11/Letter-on-ETS-and-CBAM-for-trilogue.pdf

Chicago

Carbon Market Watch. Open letter: Time to agree on an EU Emissions Trading System (ETS) and a Carbon Border Adjustment Mechanism (CBAM) that work for the climate and support industrial transformation. n.d. https://carbonmarketwatch.org/wp-content/uploads/2022/11/Letter-on-ETS-and-CBAM-for-trilogue.pdf.

Wikipedia

{{cite press release |author=Carbon Market Watch |title=Open letter: Time to agree on an EU Emissions Trading System (ETS) and a Carbon Border Adjustment Mechanism (CBAM) that work for the climate and support industrial transformation |url=https://carbonmarketwatch.org/wp-content/uploads/2022/11/Letter-on-ETS-and-CBAM-for-trilogue.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{carbonmarketwatchndopen, author = {{Carbon Market Watch}}, title = {{Open letter: Time to agree on an EU Emissions Trading System (ETS) and a Carbon Border Adjustment Mechanism (CBAM) that work for the climate and support industrial transformation}}, publisher = {Carbon Market Watch}, url = {https://carbonmarketwatch.org/wp-content/uploads/2022/11/Letter-on-ETS-and-CBAM-for-trilogue.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }