A new study by CE Delft on the effects of free allocations of carbon credits under the European Union (EU) Emissions Trading Scheme (ETS) shows that up to €14 billion of windfall profits were made between 2005 and 2008 by the European companies who claimed the ETS would hurt their businesses most.

Sectors specifically studied were the refinery, iron, steel and chemical industries. Though not specifically forbidden, companies should not pass the costs of their freely obtained ETS allowances into product prices. If they do, product prices will rise and income from citizens will be transferred to business.

This research concludes that there is ample evidence that these energy intensive industries have passed through the prices of their freely obtained allowances, resulting in windfall profits.

You can download the full report from CE Delft's website.

CE Delft: Does the energy intensive industry obtain windfall profits through the EU ETS?