Manufacturing sectors in the European Union Emissions Trading Scheme.

Summary The thesis focuses on the aggregated non-power sector covered under the EU ETS. First, the non-power sector contribution to CO2 emissions changes in the first two phases of the Scheme (2005-2012), both from a final demand perspective and a supply perspective, is compared to that of the power sector at first. Then, the implications of the non-power sector specific free allocation methodology in the third phase of the Scheme (2013-2020) are scrutinized, which constitutes one of the first thorough assessment of Phase 3 benchmarking. It is showed that both from a final demand perspective and a supply perspective, the non-power sector, through its interrelated character and its activity levels, has contributed to changes in EU ETS CO2 emissions more than the power sector did, over the 2005-2012 period. It is also showed that, despite its free allocation redistribution effects, benchmark-based Phase 3 free allocation remains flawed and may benefit from further improvements to be up to the central role of the non-power sector in the EU ETS dynamics.