GHG emissions compliance costs should be minimal for 10 of the 13 subsectors eligible for free emissions allowances in 2016, in WRI’s view. Eligibility for free GHG emissions permits is determined by a combination of trade, energy, and emissions intensity criteria. WRI believes that the American Power Act (APA) provides enough free allowances to energy intensive, trade exposed manufacturing industries that any eligible subsector—as a whole—will receive enough free permits cover all emissions in that subsector for 2016 and several years beyond.
Of the 13 subsectors WRI analyzed, only industrial gas, ethyl alcohol, and phosphatic fertilizers would not be eligible for rebates because of their relatively low-trade intensity and/or low-energy intensity (see figure). The cellulosic organic fiber and the inorganic dye and pigment manufacturing subsectors are eligible, but WRI did not include them in this analysis because of data limitations.