Between 2008 and 2019, energy-intensive industries in Europe made up to 50 billion euros in windfall profits from the European Union’s Emissions Trading Scheme (ETS), due in part to an “over-allocation” of free allowances, according to a report published on Monday 7 June by the NGO Carbon Market Watch.
Carried out by the CE Delft consultancy, the study covers the 15 most CO2-intensive sectors (iron and steel, cement, petrochemicals, etc.), plus aviation, in 19 EU countries.
In particular, it shows that industrial sectors - excluding aviation - received more free allowances (37 million tonnes of CO2 equivalent) than they needed to cover their emissions in the period 2008-2019.
Companies in these sectors were therefore able to sell their excess free allowances and thus make additional profits worth a total of around 1.6 billion euros, the report estimates.
In addition the document shows that these sectors have made additional profits worth 3 billion euros from international offsets between 2008 and 2019. Between 2008 and 2020, companies were allowed to use a certain amount of credits at a price significantly lower than the price of an emission allowance in the ETS, while they came into compliance.
The third source of additional benefits is the partial cost pass-through from the opportunity for free allowances on product prices, amounting to between 26 and 46 billion euros between 2008 and 2019.
See the report: https://bit.ly/3uTOJnm (Original version in French by Damien Genicot)