Environmental Policy and Governance, Vol 19, No 5, 2009, pp. 309-320
The EU Emissions Trading System (ETS) initially treated power producers and energy-intensive industries similarly, despite clear structural differences between these industries regarding e.g. pass through of costs. Hence, the energy-intensive industries could be seen as losing out in the internal distribution. In the January 2008 proposal for a reformed ETS post-2012, a differentiated system was proposed where the energy-intensive industries would come out relatively much better. Why is that? Although power producers still have a dominant position in the system, the increasing consensus about windfall profits has weakened their standing. Conversely, increasing attention to such profits and not least the possibility of global carbon leakage has strengthened the case of energy-intensive industries at both national and EU levels. These industries have become more active in EU processes and somewhat better organised. Finally, growing fear of lax global climate policies has strengthened the case of these industries further.