European Union authorities effort to make the industrial companies to decrease the amount of CO2 emissions produced. The main instrument of the EU environmental policy is emissions allowances trading. The main goal of this paper is to analyze the impact of the EU Emissions Trading Scheme (EU ETS) on the environmental efficiency in the national steel sectors. We define the efficiency as a share of CO2 emissions released on the amount of steel products manufactured. The analysis is performed on the data of Visegrad Four (V4) countries. The results of the panel data analysis and the single regression proved the statistical significance of the emissions allowances allocated to each sector for free on the environmental efficiency.Keywords: Emissions allowances, EU ETS, Visegrad countries, environmental efficiency, panel data
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