The EU advocates minimising potentially significant competitiveness losses in energy-intensive industries as a politically feasible approach to climate policy. The overall objective of this project was to reduce uncertainties persisting over the industry-distributional impacts of future climate change policy in the EU (sectoral incidence). Using highly disaggregated data and advanced time-series techniques, the project was estimated the ability of energy-intensive industries to pass-through additional costs induced by environmental regulation. The construction of a database with a focus on energy-intensive industries for an extensive country coverage represented an important intermediate step of the project. By combining empirical work on the pass-through potential with a numerical analysis within a general equilibrium set-up, this project provided a more solid understanding of competitiveness implications of climate policies.