The European Commission has adopted a delegated decision on the carbon leakage list over the 2021-2030 period to determine free carbon allowances for industry. The document will be submitted to the European Parliament and the European Council and should enter into force in two months if no objections are raised. Besides, two public consultations and bilateral meetings with industry and other stakeholders will be organised shortly.
Carbon leakage refers to the relocation of industrial production outside Europe due to emission reduction policies: in order to reduce this risk, ETS allowances are allocated for free to several exposed industrial sectors. The new carbon leakage list determines the free allocation that industries will receive against the risk of carbon leakage in the EU emission trading scheme (ETS) fourth phase (2021-2030). It reduces the current 177 sectors eligible over the 2015-2020 EU ETS phase 3 to just 63 and cuts the 98% of ETS-covered industrial emissions that get a free allocation to 94%.