eite

EITE stands for energy-intensive and trade-exposed sectors. In climate, energy, and industrial policy, EITE sectors are those that require large amounts of energy in production and face strong competition from foreign producers. Because such sectors are likely to experience higher costs under stringent emissions rules, policymakers monitor them closely for potential competitiveness impacts and carbon leakage.

Examples commonly cited include cement, steel, aluminum, chemicals, petroleum refining, glass, pulp and paper, and other heavy industries. The exact composition of which sectors qualify as EITE varies by country or program, as thresholds for energy intensity and trade exposure are not standardized.

Policy relevance and approaches: EITE designation influences the design of carbon pricing, subsidies, and transitional support. Measures may include exemptions, reduced energy taxes, or output-based allocations to offset higher costs. Some systems also provide support for electrification, energy efficiency, or renewable integration within EITE activities. In addition, policy discussions often consider indirect costs, such as electricity price increases driven by decarbonization, which can disproportionately affect EITE producers.

Measurement and criticism: Definitions of energy intensity and trade exposure differ across jurisdictions, leading to varying lists of eligible sectors. Critics argue that misclassification can blunt incentives for efficiency, while others worry about long-term distortions or leakage if protections are insufficient or poorly targeted. Ongoing assessment and transparent criteria are common features of EITE-related policy design.

See also: carbon leakage, energy-intensive industry, border carbon adjustment.