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The briefing examines the EU's Carbon Removals Certification Framework (CRCF), specifically criticizing the Delegated Act for permanent removals. It argues that the current methodologies for Direct Air Capture with Storage (DACCS), Biomass with capture and storage (BioCCS), and Biochar fail to account for environmental knock-on effects, lack proper monitoring and liability, and breach the 'Do No Significant Harm' principle. The author warns that these flaws could lead to certified activities increasing atmospheric emissions and undermine the EU's path to climate neutrality, potentially exposing buyers to greenwashing accusations if integrated into the EU Emission Trading System or voluntary markets.

The document advocates for the strengthening of the EU's Effort Sharing Regulation (ESR) to ensure Cyprus and the EU meet Paris Agreement goals. It identifies transport, waste management, and building heating/cooling as key sectors for emission reductions in Cyprus and proposes specific policy improvements, including higher 2030 and 2050 targets, more accurate emission baselines, and stricter governance to prevent the use of legal loopholes in forestry and the Emissions Trading System (ETS).

The document claims that the steel sector is projected to receive €49 billion in pollution subsidies between 2021 and 2030, based on an average carbon price of €25/tCO2, and notes a further claim by the industry for €4 billion for waste gases.

The report identifies four primary loopholes in the proposed 2030 Effort Sharing Decision (ESD) that could undermine the EU's climate goals. These include the use of land use offsets (LULUCF), the inflation of carbon budgets based on 2020 targets, the use of surplus EU ETS allowances, and the carry-over of unused carbon permits ('hot air'). Collectively, these loopholes could result in the EU emitting 4.7 billion tonnes more CO2-equivalent than pledged, potentially allowing emissions to increase rather than decrease between 2021 and 2030.

Carbon Market Watch and Opportunity Green call on the European Commission to maintain its climate leadership by resisting U.S. pressure to exempt international aviation from the EU ETS. The authors argue that the ICAO's CORSIA scheme is an inferior alternative to the ETS because it lacks an emissions cap and relies on inadequate offsetting. They highlight that in 2023, flights leaving EEA airports emitted 133 MtCO2, with less than half reported under the ETS, and warn that yielding to U.S. threats, such as the EU ETS Prohibition Act, would undermine EU sovereignty and climate goals.

The Effort Sharing Regulation (ESR) is the EU's primary instrument for reducing greenhouse gas emissions in sectors not covered by the Emissions Trading System (ETS), accounting for approximately 60% of total EU emissions. For the 2021-2030 period, the ESR sets an overall target of -30% compared to 2005 levels, with individual Member State targets ranging from -40% to 0% based on GDP per capita. The regulation covers transport (35%), buildings (25%), agriculture (17%), industry (16%), and waste (5%). To ensure compliance, the ESR utilizes Annual Emission Allocations (AEA) and various flexibility mechanisms, including banking, borrowing, and trading units between countries, though some are criticized as 'loopholes' that may undermine decarbonization.

The report argues that deep decarbonisation of EU energy-intensive industries requires a combination of process innovations, product shifts, and business model transformations. For chemicals, this involves transitioning to bio-based feedstocks and enhanced plastics recycling. In steel, the HIsarna process and a shift toward electric arc furnace (EAF) production from scrap are highlighted. For cement, the report emphasizes calcium looping carbon capture and storage (CCS) and clinker substitution. It concludes that public policy, specifically the EU ETS Innovation Fund, is essential to bridge the gap between demonstration and commercialisation of these technologies by 2030.

Carbon Market Watch and several partner organisations call for the immediate phase-out of free EU ETS allowances, arguing they create market failures and hinder industrial transformation. The letter advocates for full auctioning of allowances to generate revenues for green investments, the removal of free allocations for sectors covered by the Carbon Border Adjustment Mechanism (CBAM), and the rejection of a Carbon Leakage Protection Reserve. It further proposes increasing the minimum annual benchmark reduction rate to 1% and integrating carbon pricing into a broader regulatory framework including pollution performance standards and green public procurement.

The document argues that the Clean Development Mechanism (CDM) should be ended by 2020 because it undermines domestic climate action, increases global greenhouse gas emissions through 'junk' credits, and violates human rights. It specifically urges UNFCCC Heads of Delegation and the ICAO Council to stop allowing CDM credits to be used for Nationally Determined Contributions (NDCs) and aviation emissions targets.

The policy brief warns that the Kyoto Protocol's market mechanisms created an 11 gigatonne 'hot air' loophole due to inflated greenhouse gas estimates, particularly in Eastern European countries. It argues that allowing the carry-over of these credits or early action credits into the post-2020 Paris agreement would undermine climate goals and fail to drive real mitigation. The author recommends that eligibility for market mechanisms be restricted to parties with ambitious, quantified carbon budgets and that early action in developing countries be supported through new climate finance rather than credits.

The document argues that the aviation sector has benefited from excessive exemptions under the EU ETS and that the international CORSIA scheme is an ineffective substitute. It recommends bringing international flights back under the EU ETS, phasing out free allowances to airlines, and addressing non-CO2 climate impacts to align the sector with the Paris Agreement and the polluter pays principle.

The policy brief examines the role of the EU Emissions Trading System (EU ETS) in decarbonising the plastics sector. It highlights that while oil refining and bulk chemical manufacturing are covered, waste incineration remains excluded. The author argues that free allowance allocations have historically created windfall profits for refineries (4.6 billion EUR) and petrochemicals (1.7 billion EUR) between 2008 and 2015, hindering emission reductions. To drive a zero-carbon transition, the document recommends increasing the CO2 price signal, phasing out free allowances, recycling auction revenues into climate innovation, and including Municipal Solid Waste (MSW) incineration in the EU ETS to discourage the burning of 20-30 million tonnes of plastic waste annually.

Carbon Market Watch calls for the revision of the Industrial Emissions Directive (IED) to address a gap in greenhouse gas (GHG) regulation. The organization argues that the EU Emission Trading System (ETS) has failed to provide sufficient incentives for industrial decarbonisation due to the over-allocation of free allowances, which led to windfall profits of over €25 billion between 2008 and 2015. To align the IED with the European Green Deal's zero-pollution and climate neutrality goals, the author recommends deleting Article 9(1) to allow GHG emission limits in permits, making energy efficiency standards binding under Article 9(2), phasing out coal and lignite by 2030, and introducing a Paris Agreement compliance test for new industrial investments.

A coalition of trade associations, businesses, and NGOs argues that excluding waste incinerators and landfills from the EU ETS creates distorted price signals and undermines circular economy goals. They call on the Commission to use its mandate under Article 30(7) of the EU ETS Directive to propose the inclusion of these sectors by 2026 for implementation in 2028, noting that incineration emits over 95 million tonnes of CO2-equivalent annually and landfills produce potent methane emissions.

A joint NGO statement arguing that the EU's Carbon Border Adjustment Mechanism (CBAM) must remove the overlap with free ETS allowances, expand its sectoral scope, provide special considerations for vulnerable nations, and redirect all revenues to international climate finance to avoid being a 'protectionist' measure.

An open letter from various environmental and industrial organisations calling for a 68% reduction in ETS emissions, the phase-out of free allowances by 2030, and the use of CBAM as a replacement for carbon leakage protections to ensure the 'polluters pay' principle is upheld.

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 briefing argues that the European Commission's proposal to delete the MSR's invalidation mechanism would weaken the EU ETS by risking a return to structural oversupply. It asserts that the MSR must retain its ability to permanently delete allowances to maintain carbon price signals and emission reductions. Additionally, the document recommends that the MSR's intake and release thresholds and release quantities be made dynamic to scale proportionally with the shrinking ETS cap, particularly as the cap is projected to decrease from just under 1.4 billion tonnes of CO2e in 2024 to 746 million tonnes in 2031.

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.

The document explains the EU's 2030 climate and energy framework, focusing on the EU Emissions Trading System (EU ETS) and the Climate Action Regulation (CAR). It details the requirements for Member States to develop National Energy and Climate Plans (NECPs) and identifies 'loopholes' in the CAR that may delay climate action. The guide recommends that civil society engage in the NECP process to push for the phase-out of free emission allowances, the introduction of carbon floor prices, and the avoidance of flexibility mechanisms that undermine net-zero transitions.