The EU Emission Trading Scheme (EU ETS) that covers emitters from industry and energy supply representing 40 percent of the
EU's greenhouse gas emissions is the biggest implementation of a cap-and-trade scheme worldwide. In this paper, we analyse
sectoral allocation caps focusing on three emission intensive sectors ("power and heat", "cement and lime", "pulp and paper"),
assess the development of emissions and discuss the main drivers for emissions in these sectors since the start of the EU
ETS. Our analysis of allocation patterns shows that "power and heat" is the only sector permanently facing a stringent cap.
The disaggregated analysis of the development of CO2 emissions also reveals pronounced sectoral disparities, which points
at differences in the availability of emission abatement options. The data for cement and lime production show changes in
CO2 intensity pointing at an increased import of clinker. For paper and pulp production and for power and heat generation
improvements in emission intensities and to a lesser extent energy intensities can be observed, reflecting the role of fuel
shifts in short-term emission reductions.