Myths and realities around carbon leakage in Europe

The document asserts that there is no evidence of carbon leakage in Europe from 2005 to 2012, yet the European Commission continues to over-allocate free pollution permits. It criticizes the Commission for using an artificially high carbon price of €30 in its 2015-2019 carbon leakage list, which inflates industry costs and reduces government auctioning revenues. The briefing suggests that using a more realistic carbon price of €16.5 or €10 would significantly reduce the number of free permits and exclude sectors like cement and steel from full compensation.

• A fact-finding study for the European Commission found no evidence that carbon leakage occurred between 2005 and 2012; instead, industrial sectors gained a surplus of one billion free CO2 allowances valued at €5 billion, making the ETS a benefit rather than a cost for energy-intensive industries.
• The European Commission's 2015-2019 carbon leakage list uses a carbon price of €30, which is higher than the €16.5 recommended in the accompanying impact assessment, thereby artificially inflating sector costs and reducing government revenues.
• Adopting a carbon price of €16.5 would increase auctioning revenues for Member States by approximately €5 billion and reduce free pollution permits by about 25%, removing the cement sector's eligibility for 100% free allocation.
• A carbon price of €10, which aligns more closely with latest forecasts, would reduce free pollution permits by more than two-thirds and disqualify the steel sector from full carbon cost compensation.

APA

Carbon Market Watch (n.d.). Myths and realities around carbon leakage in Europe. https://carbonmarketwatch.org/wp-content/uploads/2014/09/Myths-and-realities-around-carbon-leakage-in-Europe.pdf

Chicago

Carbon Market Watch. Myths and realities around carbon leakage in Europe. n.d. https://carbonmarketwatch.org/wp-content/uploads/2014/09/Myths-and-realities-around-carbon-leakage-in-Europe.pdf.

Wikipedia

{{cite report |author=Carbon Market Watch |title=Myths and realities around carbon leakage in Europe |url=https://carbonmarketwatch.org/wp-content/uploads/2014/09/Myths-and-realities-around-carbon-leakage-in-Europe.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{carbonmarketwatchndmyths, author = {{Carbon Market Watch}}, title = {{Myths and realities around carbon leakage in Europe}}, institution = {Carbon Market Watch}, url = {https://carbonmarketwatch.org/wp-content/uploads/2014/09/Myths-and-realities-around-carbon-leakage-in-Europe.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }