The EU ETS will start operating from January 2005. It is a cornerstone of UK and EU strategy for tackling climate change, and will be by far the worldﾒs biggest programme of pollution control, worth potentially tens of billions of Euros. Many industries have raised concerns about the schemeﾒs potential impacts on industrial competitiveness. For these reasons, the Carbon Trust initiated this project to explore in depth the implications of the EU ETS for industrial competitiveness in the UK and the wider EU. The study incorporates both economic modelling, conducted by OXERA, and a series of interviews with key stakeholders primarily in industry. The full details, assumptions and results of the OXERA modelling are available on www.thecarbontrust.co.uk