Recent commentary on EU ETS free allocation has suggested that the chemical industry effectively pays almost no carbon price, pointing to an estimate that free allocation covered around 98% of emissions between 2013 and 2024.
This conclusion is drawn based on an inaccurate definition of the chemical sector. Such a definition uses a narrow sector boundary that excludes combustion and utility installations supplying heat and steam to chemical production. As a result, a significant share of chemical-sector emissions is omitted from the analysis.
When these installations are included, verified emissions exceed free allocation in every year analysed. Overall, 29.3% of verified emissions were not covered by free allocation over the period 2013–2024.
This broader view provides a more complete basis for assessing the industry’s carbon-cost exposure under the EU ETS.