On 11 Mach 2011 the Commission launched a public consultation to prepare Guidelines on how Member States can support sectors exposed to certain additional costs in the context of the 2013 EU Emission Trading System (ETS-3). The EU ETS was introduced in 2005 to promote the reduction of CO2 emissions and prevent climate change. For the 3rd trading period 2013-2020, the amended ETS Directive 2009/29/EC foresees that Member States may grant state aid in favour of sectors exposed to a significant risk of “carbon leakage”. “Carbon leakage” is the result of the increase in the CO2 component of electricity prices (indirect emission costs) which firms may not be able to pass on or to bear. It occurs when global greenhouse gas emissions increase because companies, that cannot pass on to their customers this increased electricity costs generated by the CO2 costs, move their production outside the EU to countries where no CO2 constraints exist and reduce their EU-based share in world production. State aid for indirect emission would thus aim at mitigating this potential perverse effect of the ETS system. The deadline for replies is 11 May 2011. Click here to read more about the Consultation.