The overall objective of the study was to analyse the possible risk of carbon leakage on European energy intensive industries as a consequence of the EU Climate Action. In particular, if no international agreement were reached for the Post-Kyoto era, such that the asymmetric carbon constraints between the EU (20% reduction of greenhouse gases by 2020) and the rest of the world (business as usual until 2020) prevail. To this end, the study further developed a comprehensive and coherent economic modelling framework and quantitatively assesses the macroeconomic and environmental effects of EU climate change policies. Within the modelling framework, the particular focus was on the sectoral disaggregation of energy intensive sectors.