Report: EU-ETS carbon leakage difficult to determine

A recent study by Vivid Economic and Ecofys entitled ‘Carbon leakage prospects under Phase III of the EU ETS and beyond’ has considered whether the EU ETS leads to carbon leakage and found that it is difficult to determine whether carbon leakage has occurred as a result of the emissions trading scheme. The report, with a focus on the UK in particular, also examines which sectors are affected and the factors that determine the rate of leakage.

“Nevertheless, in terms of cement production, a carbon price of EUR30 would result in the shutdown of all UK cement production and no imports from the EU as cement remains a homogenous product,” confirmed the European cement association, Cembureau. The study also found that Border Carbon Adjustments offer the greatest potential as an alternative but their implementation would be a politically-sensitive and administratively-difficult issue.