Getting Electrification Right: The broader challenge of induced emissions

Getting Electrification Right: The broader challenge of induced emissions

This report examines how the climate impact of electricity use is shaped not just by its source, but also by its timing and location. It evaluates the EU’s RED III framework and associated hydrogen targets, using the RFNBO standard as a case study. The analysis shows that ill-timed use of renewable electricity (particularly for hydrogen production) can inadvertently drive fossil generation. It argues for more strategic use of electricity to avoid these unintended consequences and support genuine decarbonisation.

CBAM extension: Closing the emissions gap

CBAM extension: Closing the emissions gap

Free allocation has long been used to address carbon leakage under the EU ETS, but it has key limitations. It only covers emissions up to benchmark levels, fails to reward cleaner EU producers, and forfeits auction revenues that could support decarbonisation. It also creates perverse incentives by making high-emission goods artificially cheap.