Carbon-CAP Final Report
Climate Strategies Newsletter: May 2017
Policies for Climate Friendly Innovation and Investment in Materials
Project Duration: June 2013 – December 2014
1. Provide objective, evidence-based research on the past and current effectiveness of the EU ETS for EII. Based on this:
2. Assess different proposals for improvement of the EU ETS in order to foster energy efficiency and greenhouse gas mitigation while maintaining international competitiveness of EII.
3. Contribute to improving mutual understanding of the different stakeholder groups involved in the implementation of emissions trading systems, i.e. the EII, governing bodies, relevant national authorities and E-NGOs.
The Underlying Policy Challenge
Most of the analysis and debate regarding the impact of the EU Emissions Trading Scheme (EU ETS) on energy intensive industries (EII) to-date has focused on the risk of carbon leakage and options to address this risk.
Now the debate has expanded to include the ability of the ETS to influence corporate operations and investment decisions. There is little evidence available to determine the extent to which the EU ETS has driven investment decisions at the company level. Therefore a more comprehensive understanding of the sensitivity of corporate decisions to the energy and climate policy framework is needed.
As the widely divergent opinions expressed and hotly debated during the discussions on the transitional and structural reforms of the EU ETS illustrate, there is urgent need an evidence-based analysis. This research project aims at assessing how production and emission volumes, the energy and CO2 efficiency and competitiveness of companies in the Energy Intensive Industries have evolved prior and during the EU ETS, how the EU ETS may have influenced investment and operational choices at the company level and what this implies for the different options for its structural reform.
Solidly based on the objective lessons learned from the first two phases of the EU ETS, the study will comment on the proposals put forward by the European Commission and by the stakeholders during the consultation period regarding a structural reform of the EU ETS and the European 2030 and 2050 energy and climate objectives. While we would expect our analytical approach to be replicated to other sectors and countries, based on the development of a methodology to analyse companies’ behaviour in the context of underlying economic productivity and emissions trends, we will focus on evidence available for the cement and steel sectors in Europe and in individual EU member states for the time being. In looking at corporate responses in different national and regional contexts, we will highlight the importance of supportive measures in some cases, and the harmful impacts of competing policies in others.
In the DOWNLOADS you will find:
Our final report on the Steel Industry published on the 15th of October, 2014
Our latest report on the Cement Industry
Our paper on ‘Including Consumption in the EU ETS
The project input paper “Strategic approaches to CO2 emissions: The case of the cement industry and of the chemical industry”
Project Leader: Karsten Neuhoff
Chair of the Project’s Steering Committee: Michael GrubbShare: