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The Clean Air Task Force (CATF) supports the European Commission's vision for clean hydrogen but urges a broader approach that includes carbon capture and storage and nuclear energy alongside renewables to accelerate decarbonization. CATF recommends sustained financial support for production demonstrations, investment in storage and delivery infrastructure, and cost assistance for hydrogen use in heavy industry and transport. Additionally, the document emphasizes the need for international collaboration, particularly with North African countries and the United Kingdom, and the implementation of transparent carbon intensity assessments for supplied hydrogen.

The policy brief examines the gap between the EU Industrial Emissions Directive (IED) and the EU Emissions Trading System (ETS), noting that the IED's exclusion of greenhouse gas (GHG) emissions limits its effectiveness. It argues that the IED and ETS are complementary rather than duplicative, and recommends that the European Commission remove the exclusion of GHGs from the IED and introduce binding energy efficiency standards to drive industrial decarbonisation.

The report examines the financial and environmental impact of the UK's carbon tax exemption for biomass power plants, specifically focusing on Drax, Lynemouth, and MGT Teesside. It argues that biomass is not inherently carbon neutral and that the current tax break diverts funds from other low-carbon renewables. The author estimates that the government could forgo up to £6.4 billion in carbon taxes by 2027 based on high-end emission scenarios. The report recommends removing the tax break, tightening sustainability criteria, and requiring full life cycle assessments for Bioenergy with Carbon Capture and Storage (BECCS) projects.

The document exposes lobbying efforts by large polluters and the aviation industry to undermine climate action during the pandemic. It details attempts by groups like BusinessEurope and national trade associations in France, Germany, and the Netherlands to delay legislation and carbon taxes. It specifically critiques the aviation industry's push for unconditional bailouts and efforts to weaken the CORSIA carbon market baseline. The author argues that the pandemic should be used to accelerate a green recovery rather than return to business-as-usual, recommending the phase-out of free pollution permits and the introduction of fuel taxes.

The author contends that the EU carbon market (ETS) fails to drive industrial decarbonisation because over 90% of industrial emissions are covered by free allowances, leading to stagnating emissions since 2012 and windfall profits for companies. To address this, the document proposes that the upcoming revision of the Industrial Emissions Directive (IED) should remove the explicit exclusion of greenhouse gases (Article 9.1), allowing carbon emission limits to be integrated into environmental permits based on 'best available technology' (BREFs).

The report finds that 2019 EU ETS emissions fell by 7.8% to 1612 million tonnes of CO2. While coal power emissions have dropped 43% since 2013, the power sector still accounts for 52% of total ETS emissions. Notably, coal-fired blast furnaces in the steel sector have become the largest emitters in seven countries, including the UK, France, and Spain.

The report analyzes Polish state aid for the power sector, concluding that subsidies for conventional power (mostly coal) were twice as high as those for renewables between 2013 and 2018. It highlights systemic inefficiencies in the EU ETS derogations, capacity markets, and the Energy Prices Act, while identifying RES auctions and EU funds as positive drivers of transition. A case study of the Bełchatów Power Plant illustrates how subsidies often support owners rather than environmental goals. The document compares Poland's cost-ineffective model with the more successful transitions in Germany and Great Britain.

The document analyzes the impact of the COVID-19 pandemic on the EU carbon market, noting a price drop of nearly 40% to just above €15/ton CO2 as of 25 March 2020. It argues that the current Market Stability Reserve (MSR) is unfit for handling sudden surpluses and proposes specific legislative reforms, including increasing the intake rate to 36% from 2024 and raising the linear reduction factor to at least 4.2%. The author warns against using the health crisis to weaken climate policies or provide unfounded subsidies to polluting sectors like aviation, steel, chemicals, and cement, urging governments to ensure post-pandemic recovery packages support the green transition.

The UK's Climate Change Act 2008 established a legally-binding framework for emissions reductions, featuring long-term targets, five-year carbon budgets, and independent oversight by the Committee on Climate Change (CCC). While the UK successfully met its first two carbon budgets and reduced emissions by 44% below 1990 levels by 2018, it is currently not on track to meet its fourth and fifth budgets or its net-zero target. The legislation is noted for its political durability across different governments and its inclusion of climate adaptation governance, though it faces potential challenges from Brexit and the need to decarbonize more difficult economic sectors.

The document analyzes the UK's Climate Change Act 2008, highlighting its use of legally binding long-term targets, five-year carbon budgets, and the role of the independent Committee on Climate Change (CCC). It notes that while the UK successfully reduced emissions by 44% relative to 1990 levels by 2018, it faces challenges in meeting future carbon budgets and its 2050 net-zero target. The study suggests Canada could adopt similar frameworks, particularly regarding independent advisory bodies and the integration of adaptation planning into climate law.

WWF and Carbon Market Watch argue that the EU Industrial Strategy must prioritise the decarbonisation of Energy Intensive Industries (EIIs), which account for approximately 16% of the EU's annual CO2 emissions. The authors propose ten 'asks', including the creation of an Independent Observatory to monitor progress, the implementation of emission performance standards, and the phase-out of free emission allowances in the EU Emission Trading System. They emphasize that investment should be directed toward zero-carbon technologies, specifically in the chemicals, steel, and cement sectors, while limiting Carbon Capture and Storage (CCS) to unavoidable process emissions.

Carbon Market Watch argues that the EU should replace the free allocation of emission allowances in the EU ETS with a Carbon Border Adjustment Mechanism (CBAM) to ensure polluters pay for their emissions. The organization asserts there is no evidence of carbon leakage and proposes that a CBAM should be used as a tool for international climate diplomacy, exempt Least Developed Countries and Small Island Developing States, and be based on carbon performance benchmarks for sectors including steel, cement, chemicals, and power.

ClientEarth argues that Poland's market reform plan is insufficient and should be expanded to address distortions in the capacity market, illegal subsidies for high-emission power, and the lack of legal frameworks for energy storage and onshore wind development.

The author advocates for the EU to integrate shipping into its carbon market through the EU ETS, combined with a dedicated decarbonization fund and a binding carbon intensity target. While acknowledging that the EU ETS alone is insufficient, the document suggests these combined measures would stimulate innovation and provide a global example for carbon pricing in shipping. The author warns against free pollution permits, offsetting, and funding for fuels that cannot be produced in climate-friendly ways, urging the EU to lead despite the slow pace of the International Maritime Organisation.

A coalition of European civil society organisations urges the EU to align its Industrial Strategy with the 1.5°C Paris Agreement target, advocating for climate neutrality by 2040 and a 65% emissions reduction by 2030. The recommendations emphasize a transition to a circular economy, the phase-out of fossil fuel subsidies, and the prioritisation of renewable electrification over hydrogen and CCS. The authors call for a 'just transition' that protects vulnerable communities and workers through retraining and the exclusion of fossil fuel investments from the Just Transition Mechanism.

Carbon Market Watch argues that while the proposed EU state aid guidelines for indirect cost compensation under the EU ETS show improvement by reducing eligible sectors and requiring energy efficiency investments, they remain insufficient. The author contends that there is no evidence of carbon leakage to justify these subsidies, which cost nearly 1.2 billion Euros between 2017 and 2018, and argues that EU ETS auctioning revenues should be used entirely for carbon neutrality rather than being returned to industry.

The report identifies a trend of 'carbon leakage' where EU countries import electricity from non-EU 'offshore carbon havens'—specifically Turkey, Ukraine, Morocco, and the Western Balkans—that lack carbon pricing. Net imports into EU Emissions Trading System (ETS) countries rose from 3TWh in 2017 to 21TWh in 2019, with imported electricity emitting an estimated 26 million tonnes of CO2 in 2019. The document warns that up to 57GW of new coal power could be developed in connected or soon-to-be connected non-EU countries, potentially undermining EU emissions cuts. To address this, the authors propose a border carbon adjustment (BCA) for electricity imports to level the playing field for generators, protect low-carbon investments, and incentivise neighbouring states to adopt their own carbon pricing mechanisms.

The European Commission's European Green Deal Investment Plan (EGDIP) aims to mobilise over 1 trillion EUR over 10 years to support the EU's transition to climate neutrality. A central part of this is the Just Transition Mechanism (JTM), which intends to mobilise at least 100 billion EUR between 2021 and 2027 to mitigate the social and economic impacts on carbon-intensive sectors. The JTM includes the Just Transition Fund (JTF), which has a projected financing capacity of 30-50 billion EUR and explicitly excludes fossil fuel infrastructure. While the author views these as positive steps, they argue that the JTM is currently insufficient to meet all needs and that funding should be strictly limited to countries supporting the 2050 climate neutrality target.

The report finds that the EU ETS region is increasingly importing electricity from non-EU neighbors with high carbon intensities, effectively importing emissions and creating 'offshore carbon havens'. In 2019, the EU ETS region imported 26 million tonnes of CO2, with a net import of 20 million tonnes. The authors argue that the disparity in carbon pricing gives a competitive advantage to high-carbon generators in countries like Turkey, Ukraine, and the Western Balkans. To combat this, the report recommends a border carbon adjustment (BCA) on gross electricity imports to protect the integrity of EU climate policy and incentivize decarbonization in neighboring states. It also warns that planned increases in interconnection capacity (31% by 2030) and new coal power projects (up to 57GW) in connected non-EU countries will exacerbate the problem.

The document details Carbon Market Watch's efforts to ensure a 'green recovery' following the COVID-19 pandemic, specifically by countering corporate lobbying and pushing for more ambitious EU climate targets. It critiques the lack of progress in global carbon market rules (Article 6) and the perceived irrelevance of the CORSIA aviation scheme. The briefing advocates for expanding the EU Emissions Trading System (EU ETS) to include international shipping and phasing out free pollution permits for heavy industry. It also assesses the inadequacy of national energy and climate plans in several EU member states and warns against the misuse of carbon dioxide removal (CDR) technologies as a substitute for emission cuts.