A recent report from Sandbag, a non-profit climate change organization, uncovered misconceptions among industry leaders in the EU, particularly in the cement, steel and iron industries.
Companies have argued against stricter caps on CO2e emissions because these regulations would act as a tax, forcing businesses to operate in cheaper developing countries. However, the current structure of the EU carbon market allows companies that buy extra certified emissions reductions (CERs) from abroad and stockpile assigned credits to make a profit.  This strategy in effect subsidizes the EU company’s competitors; the majority of CERs are created by emissions-reducing technology used by steel, iron and cement corporations in China and India. In reality, EU companies are avoiding emissions reductions strategies that are “low-hanging fruit” in favor of short-term profits that sacrifice long-term competitiveness.
So what is the solution? Sandbag reports that if the government implements stricter Carbon emissions standards on these industries, companies will make necessary reductions in-house, which allows domestic operations to be a long-term option. Also, these changes would prevent “carbon leakage,” or the possibility of CO2e emissions rising in one country because of reduced emissions in another.