The implementation of the objectives agreed in the Paris Climate Agreement and particularly, achieving the EU emission targets requires simultaneous decarbonisation of the industry, electricity and heating sectors. Given the structure of the EU ETS, informing the interplay among its sectors is of paramount importance to assess the temporal and spatial impacts of any potential policy at the national- (e.g., the coal phase-out), sectoral- (e.g. a carbon tax for the electricity sector), or the EU-level (e.g., a reform to the EU ETS). In this paper we focus on analysing the interaction between the electricity and the industry sectors, more precisely on how these either complement or stress each other, and the role played by the market stability reserve (MSR).
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