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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 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.

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.

The Social Climate Fund (SCF) is an EU initiative designed to mitigate the social impacts of the new Emissions Trading System (ETS2), which applies carbon pricing to fuels used in buildings and road transport. Operating from 2026 to 2032, the fund will provide approximately €86.7 billion in targeted support for lower-income groups and micro-enterprises. Member states must submit Social Climate Plans (SCPs) by June 2025 to access funding, which is allocated based on need. While the SCF supports investments in energy-saving renovations and zero-emission transport, it is limited to alleviating new poverty risks and is deemed insufficient to address the root causes of existing energy and transport poverty in Europe. The document recommends increasing available funds, avoiding fossil fuel lock-in by prohibiting 'low-emission' fossil-based investments, and ensuring earlier fund availability through loans.

The report by Carbon Market Watch provides a framework for implementing 'right' carbon pricing, arguing that such systems must be integrated into a broader policy mix, feature declining emission caps, and avoid loopholes like free allocations and carbon offsets. It emphasizes the need for transparency, the reinvestment of revenues into climate action and vulnerable communities, and the use of carbon border adjustments to prevent leakage while maintaining equity.

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 signatories support improving demand information and early auctions for ETS2 to increase credibility and investment. However, they oppose weakening MSR2 release conditions or extending its lifetime, arguing these measures would increase total emissions and undermine EU climate targets and the Effort Sharing Regulation. Instead, they advocate for complementary policies to reduce emissions demand, such as clean technology subsidies and the fair distribution of revenues via the Social Climate Fund.

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.

The document argues that the ETS2 is essential for Europe's climate objectives and competitiveness, warning that delays and revisions risk weakening the instrument's effectiveness. The signatories call for the operationalisation of ETS2 in 2028, the implementation of complementary social and fiscal policies, and transparency in the management of the resulting revenues to support vulnerable households and clean technology investments.

An open letter calling for a transformative Social Climate Fund (SCF) to address energy poverty and climate goals in Europe, arguing that the fund must have a flexible, non-capped budget linked to ETS revenues and carbon prices to ensure a just transition.

Carbon Market Watch proposes a comprehensive strengthening of the EU ETS, including increasing the Linear Reduction Factor to reach zero emissions by 2040 and increasing the Market Stability Reserve intake rate to 36% from 2024. The organization advocates for the full auctioning of emission allowances, earmarking 100% of revenues for climate action, and extending the system to include international maritime transport and waste incineration. Conversely, it argues against including road transport and buildings in the ETS and opposes the inclusion of Carbon Dioxide Removal (CDR) credits.

The briefing argues that energy-intensive industry lobbies in the EU use 'discourses of climate delay' to protect their financial interests, specifically by securing free emission allowances. While these sectors publicly support 2050 climate neutrality, the document claims they actively oppose short-term EU ETS reforms, such as increasing the Linear Reduction Factor or phasing out free allocations. The author asserts that the industry's narrative regarding 'carbon leakage' lacks empirical evidence and serves as a justification for windfall profits. The briefing further details how technical factors in the free allocation formula (BM, HAL, CLEF, and CSCF) are manipulated by lobbyists to maintain high levels of free permits, thereby undermining the 'polluter pays' principle and delaying industrial decarbonisation.

The document outlines how individuals in sales, consulting, and creative roles can leverage their positions to drive climate impact. Key recommendations include refusing to work with fossil fuel and extractive companies, integrating carbon fees into pricing, and shifting sales models toward services and repair to reduce waste. It also suggests using client relationships to encourage the adoption of science-based climate targets and minimizing carbon-intensive business travel.

The document argues that U.S. agriculture can achieve carbon neutrality by combining emissions reductions—particularly of nitrous oxide and methane—with increased soil carbon sequestration. It details 'carbon farming' practices such as cover cropping, agroforestry, and prescribed grazing, while critiquing the current 'farm safety net' for subsidizing carbon-intensive industrial operations. The authors propose a systemic shift toward payments for ecosystem services, reformed crop insurance, and updated federal research and extension priorities to incentivize climate-friendly agriculture.

Sandbag argues that a standalone UK ETS would be dysfunctional due to its small size and vulnerability to volatility and speculation. The organization recommends that the UK either remain part of the EU ETS or implement a carbon tax with a floor based on the average EU ETS price. Key proposals include expanding carbon pricing to fossil gas and fugitive methane, ending the zero-emissions treatment of large-scale biomass burning, and distributing carbon revenues to citizens as a 'climate dividend'.

The document provides the technical annexes for the Forest Declaration Assessment, detailing the definitions and methodologies used to measure deforestation, forest degradation, and restoration potential. It establishes a 'gross zero' deforestation benchmark for 2030, requiring a linear 10 percent annual reduction in loss relative to a 2018-2020 baseline. The methodology incorporates satellite data and econometric models to estimate GHG emissions from forest loss and identifies 'cost-effective' restoration potential based on a carbon price threshold of USD 100/tCO2eq. A provided table lists the 30 countries with the highest absolute levels of deforestation in 2021, showing varied trends such as a 3% increase in Brazil and a 25% decrease in Indonesia compared to the baseline.

The report analyzes India's steel industry, which accounts for 12% of the country's CO2 emissions, and argues that transitioning to green hydrogen-based steelmaking is the most viable path to net zero by 2070. It identifies significant barriers, including the high cost of green hydrogen, the lack of a legal definition for 'green steel', and the young age of existing blast furnace fleets. The authors recommend government intervention through carbon pricing, mandatory green steel procurement in public projects, and the implementation of green hydrogen purchase obligations to make low-carbon technologies commercially competitive.

The report documents a sophisticated ecosystem of climate disinformation in Canada, where denial and delayism are used to delegitimise scientific consensus and policy. It identifies regional vulnerabilities, particularly in Alberta, Saskatchewan, and Manitoba, and highlights how climate narratives are often blended with anti-feminist, anti-2SLGBTQIA+, and anti-immigrant tropes. The analysis details the roles of domestic media, influencers, and transnational linkages in amplifying claims that climate policy is an authoritarian tool of global elites.

The briefing argues that as countries increase climate ambition and carbon pricing, carbon border adjustments (BCA) are becoming inevitable to prevent carbon leakage. To ensure these mechanisms remain environmental rather than protectionist, the author proposes specific principles—such as prioritizing leakage prevention over competitiveness and providing credits for equivalent foreign carbon pricing—and best practices regarding coverage, data standards, and appeal mechanisms. The author suggests the World Trade Organization (WTO) as the ideal multilateral forum for discussing these guidelines, specifically highlighting the 2021 Ministerial Conference (MC12) as a critical starting point.