Search Climate Insights Directory

The document argues that the EU's current legal framework, which excludes installations under the Emissions Trading System (ETS) from certain Industrial Emissions Directive (IED) requirements, is insufficient to meet the goals of the Paris Agreement and the European Green Deal. ClientEarth contends that the ETS alone cannot drive full decarbonisation because it lacks a focus on prevention technologies and allows for the displacement of pollution. The brief proposes a synergetic approach where the IED provides mandatory, scientifically-based greenhouse gas (GHG) emission limit values (ELVs) and energy efficiency standards based on Best Available Techniques (BAT). This would align EU policy with the 'prevention principle' and the 'Hierarchy of action on pollution', ensuring that emissions are avoided by design rather than just traded. The author concludes that deleting Art. 9 IED and Art. 26 ETSD would create a 'win-win-win' for operators, the climate, and the environment by stimulating technological innovation and ensuring a level playing field.

Carbon Market Watch recommends strengthening the EU ETS by increasing the Linear Reduction Factor to 5.8% (or 3.1% with a cap reduction), raising the Market Stability Reserve intake rate to 36%, and ending free allowances for aviation and energy-intensive industries. The organization advocates for the inclusion of international maritime transport and waste incineration, while opposing the inclusion of road transport, buildings, and Carbon Dioxide Removal (CDR) credits.

Carbon Market Watch expresses significant concerns regarding the Taskforce on Scaling Voluntary Carbon Markets' blueprint, stating that it risks creating a speculative financial market that benefits the financial sector more than the climate. The organization argues that scaling the market without first addressing systemic integrity issues, such as the lack of transparency and the use of low-quality offsets, could lead to widespread greenwashing and a net increase in global greenhouse gas emissions. It specifically opposes the use of biological carbon sinks for offsets due to non-permanence and measurement uncertainties, and rejects the introduction of core carbon spot and futures contracts as a means of increasing opacity.

The author contends that expanding carbon pricing to the transport and buildings sectors would shift the burden of emission reductions from polluting companies to consumers and undermine the EU's goal of cutting greenhouse gas emissions by at least 55% by 2030. The text argues that the Effort Sharing Regulation (ESR), which covers approximately 60% of EU emissions, should be improved by raising binding national targets and removing 'loopholes'—specifically flexibilities related to the EU emissions trading scheme and the land-use sector—rather than being repealed or reduced in scope.

The document examines five major industrial clusters in Belgium and the Netherlands, highlighting their economic significance and high greenhouse gas emissions. It argues that because each cluster's governance and industrial makeup differ, 'tailor-made policy' is required rather than generic instruments. The brief identifies the Antwerp-Rotterdam-Rhine-Ruhr Area (ARRRA) as a critical meta-cluster connected by extensive pipeline infrastructure. It recommends a multi-level governance approach where cluster authorities handle local planning and implementation, while national and EU bodies provide high-level coordination, regulatory frameworks, and the bulk of the financing for the transition to net-zero by 2050.

The policy brief argues that while free allocation in the EU ETS protects against carbon leakage, it mutes the carbon price signal for consumers, leading to underinvestment in material efficiency. To solve this, the authors propose a 'climate contribution'—a weight-based charge on the consumption of carbon-intensive materials sold in Europe. This mechanism would pass carbon costs to users and generate revenue for climate action without the high administrative complexity or trade conflict risks associated with border-focused CBAMs. The brief compares this approach against three other CBAM scenarios, concluding that combining dynamic free allocation with a climate contribution maintains a level playing field for exports and avoids 'resource shuffling' and downstream leakage.

The document outlines requirements for the EU's proposed carbon border adjustment measure, asserting that it must replace all existing industry protections, such as free pollution permits, to avoid being mere protectionism. It proposes that foreign producers buy pollution permits under the EU carbon market to strengthen carbon prices and incentivise innovation. The author suggests targeting the most polluting sectors—specifically steel, cement, and bulk chemicals—while exempting Least Developed Countries (LDCs) and Small Island Developing States (SIDS). Finally, it argues that all revenues generated should fund climate action, either through EU innovation funds or as climate finance for developing nations.

The report estimates that a net increase in investment of approximately 66 billion SEK is required to decarbonise Swedish heavy industry by 2045. This includes 50 billion SEK for the four largest emission sources—steel, petrochemicals, refining, and cement—and 15 billion SEK for carbon capture and storage (CCS) in the pulp and paper sector to achieve net-zero. The analysis reveals that financing challenges vary by sector: steel and petrochemicals face high capital expenditure (CAPEX) hurdles due to the need for transformative new processes, while cement and refining are primarily constrained by high operational expenses (OPEX) associated with adding CCS. The report argues that while the total costs are manageable compared to other national infrastructure spending, current carbon pricing under the EU ETS is insufficient to drive these investments, necessitating increased public risk-sharing and targeted industrial policy.

The report finds that Poland was responsible for 70% of methane leaks from Europe's operational coal mines in 2018. These emissions, totaling 659 kilotonnes, have a 20-year climate impact equivalent to 56.7 million tonnes of CO2, which exceeds the 2018 CO2 emissions of the Belchatów power plant. The analysis identifies two companies, JSW and PGG, as responsible for 90% of leaks from operational hard coal mines, with the Budryk deep mine identified as the largest emitter in Europe. The report recommends accelerating methane reduction plans, prioritizing the closure of methane-intensive mines, banning the release of captured methane, and integrating coal mine methane into the EU Emissions Trading Scheme by 2030.

The report highlights that Poland accounted for 70% of methane leaks from active coal mines in Europe in 2018. It argues that these emissions have a greater climate impact than the CO2 emissions from the Bełchatów Power Plant when using a 20-year warming horizon. The analysis identifies JSW and PGG as the dominant emitters, with the Budryk mine being the largest single source in Europe. The document recommends accelerating emission reduction plans, closing high-emitting mines, banning the release of captured methane, and integrating methane into the EU ETS by 2030.

Carbon Market Watch criticizes the EU's 2021-2030 state aid guidelines for compensating electricity-intensive industries against 'indirect costs' from the EU ETS. The author contends that the final rules expand the list of eligible sectors—including oil refineries and plastic producers—via an opaque 'qualitative assessment' and remove stringent climate conditions. The document further claims that the formula for calculating aid is weakened, ignoring the decarbonization of the power grid and risking windfall profits for industry while undermining the EU Green Deal.

The Clean Air Task Force (CATF) supports the European Commission's proposed Carbon Border Adjustment Mechanism (CBAM) as a tool to prevent carbon leakage and encourage global climate action. CATF argues that a CBAM must replace the free allocation of certificates under the European Emissions Trading System (ETS) and be paired with innovation policies for advanced decarbonization technologies. The organization specifically warns against including methane in the ETS due to the complexities and potential counter-intuitive effects of Global Warming Potential (GWP) time horizons. CATF recommends that the CBAM apply to all imported energy based on verifiable greenhouse gas intensity, exempt Least Developed Countries and Small Island Developing States, and reinvest all revenues into climate innovation both within the EU and in developing countries.

The document examines the progress of five EU Member States in developing policies for a climate-neutral industry. It finds that while most have set 2030 targets, these are generally conservative and focused on energy efficiency. The Netherlands and Germany are the most advanced, implementing specific incentives for advanced technologies, whereas Hungary, Poland, and Spain remain largely in the agenda-setting and policy-formulation stages. The brief emphasizes the need for a predictable legal environment and harmonized EU policies to avoid distorted competition in the basic materials sector.

Carbon Market Watch proposes ten principles for the EU's Carbon Border Adjustment Measure (CBAM), arguing that it must replace free allocation of allowances in the EU ETS to adhere to the 'polluter-pays' principle. The organization recommends that CBAM cover direct and indirect emissions in high-emitting sectors like steel, cement, and bulk chemicals, and be implemented as an extension of the EU ETS. Key social and diplomatic recommendations include exempting Least Developed Countries (LDCs) and Small Island Developing States (SIDS), recycling revenues into climate action, and using the mechanism to complement international climate diplomacy and product requirements.

A joint letter from civil society organisations advocating for the inclusion of the shipping sector in the EU Emissions Trading System and the implementation of a -40% GHG efficiency target by 2030 to address rising maritime emissions.

The document argues that CCfDs can mitigate regulatory and price uncertainty in carbon markets while providing innovation incentives for low-carbon industrial technologies. It positions CCfDs as one element of a broader five-part policy package including climate contributions, renewable CfDs, green public procurement, and product carbon requirements. The brief examines the economic costs and social values of CCfDs, suggests national-level implementation to be practical despite state aid complexities, and discusses their potential integration with COVID-19 Recovery Funds to ensure long-term business cases for green industrial investments.

ClientEarth urges the European Commission to implement strict, mandatory regulations on methane emissions across the fossil fuel and agriculture sectors. The organization argues that the EU, as the world's largest importer of fossil gas, has the commercial power to mandate low-emission supply chains. Key recommendations include expanding the EU Emissions Trading System (ETS) to cover methane, introducing a Carbon Border Adjustment Mechanism (CBAM) for methane-emitting imports, and reforming the Common Agricultural Policy (CAP) to end subsidies for intensive livestock production. ClientEarth also highlights the health risks of indoor gas appliances and the need to counter industry misinformation by replacing the term 'natural gas' with 'fossil gas'.

The report by WWF and Carbon Market Watch argues that the EU Industrial Strategy lacks the specific targets, timelines, and governance structures necessary to achieve climate neutrality in energy-intensive industries. While it welcomes the focus on circularity and the Just Transition Mechanism, the authors highlight critical gaps regarding emission performance standards, the phase-out of free carbon allowances, and the lack of civil society inclusion in new industrial alliances.

Carbon Market Watch calls for the European Commission to revise non-financial reporting directives for companies with over 500 employees. The organization advocates for mandatory disclosures on climate risks, decarbonization pathways, state aid, 'Just transition' efforts, and lobbying expenditures. Additionally, it seeks greater transparency on the use of the EU emission trading scheme (EU ETS), including internal CO2 pricing and the use of carbon offsetting, to ensure investments align with the European Green Deal.

The Clean Air Task Force (CATF) supports the European Commission's goal of at least 55% emissions reductions by 2030 and argues that achieving carbon neutrality by mid-century requires a diverse portfolio of advanced technologies beyond wind and solar. CATF recommends optimizing the EU ETS to fund commercial-scale demonstrations of carbon capture and hydrogen, implementing mandatory leak detection and repair for oil and gas systems, and using the EU's purchasing power to pressure major gas suppliers like Russia and Qatar to reduce methane emissions.