The Commission on 23 January announced plans to beef up the EU's Emissions Trading Scheme (EU ETS). But the proposals delayed making a decision over which industries could benefit from either free CO2 emission allowances or a tax on imports from competitors operating in countries with less costly environmental rules.

The Commission is keen to protect industries that might move from the EU because of emission caps or emission costs. The metal and paper industries are in the frontline of emission limits. The fear is that high emitting industries won't be able to afford to stay competitive in the EU with its restrictions on emissions and will have to relocate to the developing world where they will emit at the same or high levels because there are fewer emissions controls. This is commonly called emissions leakage.

It is likely that the EU will consider giving heavy polluters in the short term free emissions allowances but the outcome will dependent on post Bali climate and emissions agreements.

Both the metal and paper industries welcomed the development.