Reports and briefings

The following reports and briefings have been produced thanks to the support of our core funders: The European Climate Foundation, the The Ecofin Foundation and the Esmee Fairbairn Foundation.

Bespoke analysis, reports and briefings on a range of topics can be commissioned - please contact us if you wish to discuss options.

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    September 2016

    The EU carbon market is broken for all the wrong reasons. Successful advances in the Energiewende agenda across Europe now require adjustment of the EU Emission Trading System (EU ETS) to fit with the reality of falling emissions. We have already accumulated a surplus of more than 1,827MtCOe  and by 2020 emissions will be likely well below the EU ETS cap due to past emission reductions.

    While European leaders discuss the EU ETS post-Paris review clause, in light of reductions in emissions from electricity generation that occurred over the last decade, the priority should be enforcing and harmonising the current EU climate legislation.

    Saving the EU ETS will take German leadership. Sandbag encourage German Ministers to take more responsibility for past emission reductions and propose as a part of their Government’s position that:

    • the EU ETS Phase 4 starting point in 2021 is based on actual emissions in 2019 or 2020;
    • the MSR is stabilised through a provision for a size limit of 1 billion allowances in the MSR (10 years’ worth of the return rate). Any allowances above this threshold should be retired.

    In our new briefing Germany and the EU ETS we explore how presented policy options can be implemented in a way that ensures that German industry genuinely exposed to carbon leakage is protected with free allocation of allowances after 2020.



    July 2016

    This report shows that EU-wide cost-effective emission reduction opportunities will not align with Member States’ national reduction targets. These targets will be set based on GDP/capita with some adjustments in line with the solidarity principle. If the sharing of effort were aligned better with cost-effective reduction opportunities spread across the Member States, the Effort Sharing Decision (ESD) target could be increased to 50% below 2005 and up to 2 billion tonnes of additional emission reductions could be delivered between 2021-2030. 

    This report should be considered alongside The Effort Sharing Dinosaur (May 2016), our report revealing problems with the current scheme.

    Key recommendations

    In order to facilitate additional, fair, and cost-effective emissions reductions in the ESD by 2030, and consequently, in the whole economy by 2050, in its proposal for ESD II, the EU institutions should:

    • Introduce a new market-based flexibility between Member States; the European Project-Based Mechanism (EPM).
    • Prevent the inclusion of any flexibilities that would dilute the 2030 target and increase the surplus of AEAs. This includes not carrying-over the expected surplus of AEAs from ESD I to ESD II and avoiding the creation of flexibilities with other climate policies (particularly ETS and LULUCF) before 2030;

    If an EPM is introduced into ESD, it could pave the way towards the establishment of an EU economy-wide carbon budget post-2030 that will make use of the efficiency created by market based mechanisms (an EPM and the ETS) to enable a more ambitious emission reduction effort in the period until 2050. 

    July 2016

    Coal pollution and its health impacts travel far beyond borders, and a full coal phase-out in the EU would bring enormous benefits for all citizens across the continent. Today Sandbag has published a new report on the health impacts from air pollution of all EU coal-fired power stations for which data is available (257 out of 280). We cooperated with the Health and Environment Alliance (HEAL), Climate Action Network (CAN) Europe, the WWF European Policy Office to make this publication possible. 

    The report reveals that in 2013 their emissions were responsible for over  22,900 premature deaths, tens of thousands of cases of ill-health from heart disease to bronchitis, and up to EUR 62.3 billion in health costs.

    For the first time, the report analyses how the harmful dust caused by coal plants travels across borders and the effect this has. Watch a visualisation of how pollution spreads around Europe here.

    The five EU countries whose coal power plants do the most harm abroad are Poland (causing 4,690 premature deaths abroad); Germany (2,490); Romania (1,660); Bulgaria (1,390) and the UK (1,350).      
    The five EU countries most heavily impacted by coal pollution from neighbouring countries, in addition to that from their own plants are: Germany (3,630 premature deaths altogether), Italy (1,610); France (1,380); Greece (1,050) and Hungary (700).

    The report shows that each coal power plant closed provides a major boost for the health not only of those living nearby, but also for those abroad: the UK planned phase-out of coal by 2025 could save up to 2,870 lives every year - more than 1,300 of them in continental Europe. If Germany decides to phase out coal, it could avoid more than 1,860 premature deaths domestically and almost 2,500 abroad every year.

    You can find more background information, including quotes from the experts who contributed to the report, on WWF European Policy Office  website.

    July 2016

    A report produced with the Ecofin Research Foundation, Element Energy, Poyry, and the investment community represented in the UK CCS Commercial Development Group. 

    This report outlines the key actions needed for the government's forthcoming CCS strategy, due Q4 2016. The report reviews the literature on CCS development thusfar, and shows that crucially, the new strategy must:

    1. Establish a new CCS delivery model in collaboration with CCS investors
      To get the UK’s first commercial CCS projects off the ground, it is vital that the government, project developers and private sector capital providers work together (through working groups, workshops and bilateral discussions) to develop a bankable investment mechanism for CCS on power and industry.
    2. Make the business case for government and industry co-investment
      It is positive news that the government is continuing to provide some level of support to remaining projects. It is important that funding to existing and future projects is provided not as an isolated initiative but as part of an overall business plan and policy to deliver CCS.

    June 2016

    Rebasing the EU ETS Phase 4 cap

    Sandbag’s report on Phase 4 reform of the ETS proposes that the Phase 4 EU ETS cap should be realigned to match the reality of emissions in 2020, preferably accompanied by an increase in the Linear Reduction Factor:

    • In 2015 emissions covered by the EU ETS were already below the level of the cap for 2020. By 2020 emissions look likely to be over 10%, and perhaps much more, below the cap at the end of Phase 3, which was set in 2010 and so fails to reflect current realities. This will lead to additional surplus allowances generated throughout Phase 4; 

    • A simple adjustment to bring the cap at the start of Phase 4 in line with the reality of emissions would go a long way towards solving this problem by reducing the Phase 4 cap, likely by around 2 billion tonnes or more over the 10 years of the phase;

    • Aligning the cap with actual emissions tightens the cap more quickly and more effectively than changes to the Linear Reduction Factor (LRF).

    June 2016

    Sandbag's projections show that under many scenarios the MSR will grow to contain several billion allowances.

    This risks endangering both market stability and long term environmental goals. A threshold needs to be put in place to limit the size of the MSR with allowances above this threshold retired.

    May 2016

    Sandbag's response to the European Commission consultation on the policy options for market-based measures to reduce the climate change impact from international aviation

    May 2016

    Avoiding extinction for the EU’s climate ambition

    Sandbag’s latest report shows the EU’s biggest climate instrument - the Effort Sharing Decision (ESD) -  is not on track to deliver the EU’s longterm emission reduction targets:

    • the ESD in 2020 will have a huge surplus of 2.6 billion tonnes of carbon dioxide (in the form of Annual Emission Allowances);

    • the ESD will deliver no emissions reductions beyond business as usual until after 2030, unless the baseline for the start of the next phase is not changed to match real emissions levels;

    • the ESD’s 30% emissions reduction target for 2030 is too low, and puts the EU on a path to missing its 2050 goals.

    Pages 13, 14, 19 of the report have been amended on the 28/06/2016, reflecting a revised interpretation of the Art. 3.2, 3.3, 3.5 of the Effort Sharing Decision (ESD) on flexibilities available to the Member States under ESD during 2013-2020. The change doesn't affect any of the substantive analysis, conclusions or recommendations originally made in the paper and published on 27/06/2016.

    April 2016

    Following today's announcement (18th April 2016) that Vattenfall intend to sell their German lignite assets to EPH, Sandbag releases this paper investigating the past acquistions of EPH, and their likely result for the climate.


    Dave Jones, Sandbag's Carbon & Power analyst comments:

    "This is a lose-lose-lose situation. 

    It's a lose for the climate, because EPH are unlikely to implement a just phase-out that Vattenfall could have implemented, meaning the lignite plants are likely to stay open longer than they would have otherwise. 

    It's a lose for the Swedish government, because it is very likely that the sale price to EPH is so low, that it might even be negative when you take into account liabilities left in Vattenfall.  Keeping the assets, and phasing-out generation would arguably be more profitable.  

    It's a lose for German workers.  EPH has a track record in rapidly and aggressively cutting jobs at the plants it acquires, rather than the measured phase-out Vattenfall could implement, aided by German government transition funding for green jobs in Lusatia.

    It's a big gamble to hand these assets at a cut-price, or even a negative price, to a faceless organization. EPH have no public shareholders to be responsible to, no electricity customers to be responsible to, and no ownership from regional or national government to be responsible to.  With electricity prices so low and lignite so unprofitable, EPH ownership leaves Lusatia's lignite industry in a precarious position, with the possibility it could collapse at any time, with devastating consequences to the local community."


    Media contact for in-depth analysis on EPH and other utilities: Dave Jones, Carbon and Power analyst.  +44 7586 947111

    April 2016

    This briefing presents an amendment to the 2015-16 UK Energy Bill drafted in partnership with Client Earth, and supported by WWF, RSPB and Greenpeace.

    It seeks to make the UK government directly accountable for emissions in the sectors covered by the EU Emissions Trading Scheme (ETS) when determining whether the UK is staying within its national carbon budgets. The EU ETS covers emissions from the electricity sector and heavy industry. Currently, the carbon accounting regulations allow the government to ignore emissions from these sectors when determining whether the carbon budgets have been met. In effect, this makes the government responsible for only half the carbon budgets – those residual parts of the carbon budget that do not fall under the scope of the EU Emissions Trading Scheme (e.g. transport, heat, agriculture).

    This amendment was presented to the 2015-16 Energy Bill at report stage as New Clause 10, where it was supported by the Labour, the SNP, the Lib Dems and the Greens. We write up the vote in more detail at this blog.

    It has now been retabled by Labour as the Bill has returned to the House of Lords, where we eagerly await a decision.

    See all our reports.