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The briefing examines the use of Upstream Emission Reductions (UERs) to meet the Fuel Quality Directive's (FQD) target of reducing transport fuel greenhouse gas intensity by 6% by 2020. It warns that the current implementing measure lacks additionality requirements and oversight, creating a high risk of double counting across EU Member States, between the EU and third countries, and between the FQD and the EU ETS. The author highlights that projects from the Alberta Offset System, including road construction for tar sands mining, could potentially qualify. To ensure environmental integrity and reduce administrative burdens, the document recommends that Member States restrict UERs to CDM projects in Least Developed Countries, noting that a single project in Angola could potentially meet the entire estimated 0.8% gap in the FQD target.

The author contends that shorter UNFCCC commitment periods (five years) are superior to longer ones (ten years) because they prevent the 'locking in' of under-ambitious emissions targets. While the EU has advocated for a ten-year period to provide investment security and align with its 2030 Energy Package, the author argues this package lacks sufficient ambition and could freeze global climate aspirations. The text also notes that the US supports shorter periods due to domestic political volatility and the likelihood that a long-term legally binding agreement would be rejected by the US Congress.

The author contends that 'corporate capture' of the UN and EU has prioritised profit over climate action, leading to ineffective market-based policies and rising emissions. The text advocates for a binding international agreement based on scientific evidence and historical responsibility, rather than political compromise. It calls for the abandonment of coal—which accounted for 43% of CO2 emissions from fuel combustion in 2012—and the adoption of 'energy sovereignty' through decentralized, democratically controlled renewable energy. The author argues that the EU should lead by replacing market mechanisms like the EU-Emissions Trading Scheme with regulation, taxation, and subsidies to achieve necessary emission cuts.

Carbon Market Watch argues that previous market-based mechanisms, such as the CDM and EU ETS, failed due to oversupply and poor environmental integrity. To prevent these failures in a post-2020 regime, the organization recommends strict eligibility rules based on national ambition, the exclusion of REDD-plus and agriculture from carbon markets, and the implementation of discounting to ensure net atmospheric benefits. It further calls for a UN-led standard-setting body, a robust institutional safeguard system to protect human rights, and a share of proceeds from all traded units to be allocated to the Adaptation Fund.

The report exposes the dual nature of Anglo American's operations: the severe human rights and environmental impacts of its El Cerrejón coal mine in Colombia, and its strategic lobbying within the UNFCCC and other international bodies to maintain a fossil-fuel-based energy model. It argues that the company promotes 'false solutions'—such as carbon markets and carbon capture and storage (CCS)—to avoid structural changes and continue profiting from pollution. The authors call for the removal of corporate privileged access to climate negotiations and the end of public subsidies for polluting energies.

The report analyzes the EU's 2030 climate deal, which includes a binding 40% domestic greenhouse gas reduction target, a 27% renewable energy target, and a 27% energy efficiency target. Carbon Market Watch argues that these targets fall short of the 55% reduction required for a fair contribution to global climate goals. The analysis highlights significant risks to the 40% target, specifically the oversupply of EU ETS allowances (estimated at 2.6-4.5 billion by 2020) and the use of ETS allowances to meet non-ETS sector targets. It also criticizes the continuation of free emission allowances for industry and the provision of financial support to the power sectors of low-income Member States, which may prolong the use of coal.

Carbon Market Watch criticizes EU leaders for adopting a 2030 climate deal that it argues weakens emission reductions to 31% due to excess permits and provides up to €300 billion in subsidies to industry. Separately, the organization highlights human rights abuses and lack of consultation affecting indigenous communities in Guatemala associated with the UN-registered Santa Rita hydroelectric project.

The We Mean Business coalition, representing businesses with a market value of at least EUR 4.33 trillion in Europe, advocates for robust climate policy to drive economic growth and energy independence. The coalition requests binding 2030 commitments from European leaders for at least 40% greenhouse gas emissions reductions, a 30% share of energy from renewable sources, and 30% energy efficiency savings. This position is supported by various corporate groups and declarations, including a letter from The Prince of Wales’s Corporate Leaders Group and a joint declaration by companies such as IKEA, Unilever, and Philips. Additionally, CDP data indicates that 92% of Euro 300 companies reporting with CDP view climate regulation as a business opportunity.

Carbon Market Watch warns that the leaked 2030 Council Conclusions could reduce the effective EU greenhouse gas reduction target from 40% to 26% due to the potential banking of 'hot air' (surplus allowances). The organization criticizes the 40% target as postponing urgent action, opposes the use of EU ETS allowances to meet non-ETS targets, argues against including transport in the EU ETS, and condemns the dynamic allocation of free pollution permits as an industry subsidy.

The document argues that the European Parliament's decision to uphold the European Commission's carbon leakage list, using a €30 per tonne carbon price, leads to an over-allocation of free emission permits. It claims this results in a loss of approximately €5 billion in taxpayer revenue over five years and provides windfall profits to polluters, despite a lack of evidence for actual carbon leakage.

Carbon Market Watch argues that the EU ETS has failed to drive decarbonisation due to a surplus of over 2 billion emission allowances, leading to carbon prices around 5 euros per tonne. While the proposed Market Stability Reserve is a necessary step, the author contends it is 'too little, too late' because it is scheduled for 2021 rather than July 2016 and fails to permanently cancel allowances, which could lead to an unstable carbon price.

Carbon Market Watch warns that the proposed 40% greenhouse gas emission reduction target for 2030 is insufficient and threatened by 'hot air' loopholes. Specifically, the carry-over of surplus allowances from the EU ETS and Effort Sharing Decision could reduce actual emissions cuts to as low as 26%. The author advocates for the retention of nationally binding renewable and energy efficiency targets to drive innovation and decarbonisation.

The report identifies a portfolio of low-carbon opportunities for the European steel sector, ranging from energy efficiency and fuel shifting to breakthrough technologies like Carbon Capture and Sequestration (CCS) and increased recycling. It argues that current EU ETS mechanisms, particularly free allocation based on historic volumes, fail to provide sufficient incentives for deep decarbonisation and high-value product innovation. The authors recommend a structural reform of leakage protection, specifically proposing a combination of output-based allocation and the inclusion of consumption in the EU ETS to create a credible business case for breakthrough technologies and material efficiency. The report also emphasizes the need for sustained public funding for process innovation to overcome the 'valley of death' in technology scaling and suggests strengthening links between steel producers and downstream consumers, particularly in the automotive and construction sectors, to drive demand for lightweight, high-strength steels.

The briefing warns that loopholes in the EU Emissions Trading System (EU ETS) and the Effort Sharing Decision (ESD) have created a massive surplus of emission rights. This "hot air"—estimated at 4 billion tonnes—threatens to undermine the EU's 2030 climate ambitions by allowing continued pollution, effectively lowering a proposed 40% emission reduction target to 26%. The author calls for the permanent removal of these surpluses to protect climate goals.

The briefing warns that loopholes in the EU's climate framework have created a 'bubble' of 4 billion tonnes of unused pollution credits. This surplus, split between the EU Emissions Trading System (EU ETS) and the Effort Sharing Decision, threatens to undermine the EU's proposed 2030 goal of reducing greenhouse gas emissions by 40% compared to 1990 levels. The author argues that if these credits are carried over into the 2030 framework, the actual emission reductions could drop to 26%.

The document warns that a 'bubble' of 4 billion tonnes of excess emission rights threatens to undermine the EU's proposed 2030 climate target. It details how surpluses in the Effort Sharing Decision (ESD) and the Emissions Trading System (ETS) could be carried over into the 2030 framework, effectively lowering the actual emission reductions from a proposed 40% to 26% if not addressed by EU leaders.

The document warns that a 'hot air bubble' of 4 billion pollution credits across the EU ETS and ESD could reduce the actual effectiveness of the EU's 2030 climate target from 40% to as low as 26%. It details how 1.35 billion tonnes of surplus credits in the Effort Sharing Decision and 2.6 billion excess allowances in the Emissions Trading System are created by weak targets, international offsets, and free permit allocations to industry. The author calls on EU Heads of State to disallow the banking of ESD surpluses and permanently cancel excess EU ETS allowances to prevent these 'phantom rights to pollute' from carrying over into the 2030 framework.

The document outlines a proposal to introduce a 'Charge' for carbon-intensive goods, such as steel and clinker, based on the EU ETS permit price and Best Available Technology (BAT) benchmarks. Drawing on the European excise system, it suggests a 'Production Sphere' where registered 'Carbon Keepers' and 'Carbon Warehouses' can handle goods under duty suspension, and a 'Consumption Sphere' where the charge is triggered upon sale to unregistered entities or final consumers. The report recommends a Carbon Monitoring and Control System (CMCS) for tracking movements and the use of de minimis thresholds for imports based on the ratio of carbon value to product value.

The document critiques the proposal for 'dynamic allocation' of free emission allowances in the EU ETS post-2020, which would remove caps on free permits for industrial sectors. It argues this model enables windfall profits, reduces incentives for innovation, and shifts a significant financial burden to taxpayers. The author recommends full auctioning of allowances as the default method to uphold the polluter-pays principle and suggests using auctioning revenues to fund an industrial innovation fund for low-carbon technologies.

The document evaluates the EU's climate policy instruments, finding that while 2020 targets are likely to be met, the reductions were driven more by the economic crisis than by policy. It highlights low cost-effectiveness due to a lack of uniform carbon pricing and notes that energy efficiency targets are at risk.