ABSTRACT
This chapter shows that the main importance of the emissions trading system (ETS) in the sector concerns the long-term strategic consequences of carbon pricing. The oil companies base their long-term strategies on forecasts or scenarios. The ETS has affected these forecasts by changing company beliefs about a future in which concerted governmental action, a price on carbon emissions and the need for more low-carbon energy will occupy a more prominent place. The chapter analyses how the ETS works together with other company-internal and company-external factors to co-produce various outcomes. It presents the climate strategies of the major companies covered by the ETS and the changing role and position of the European industry association, Europia. The European Union (EU) ETS represents an important driver for climate strategies, but still only one of many, as the oil industry is composed of high-profile multinational companies exposed to a wide range of risks and opportunities around the world.
