INCENTIVIZE at SETAC Europe 36th Annual Meeting

Abstract submission opens 13 October and closes 26 November 2025. Read more on the SETAC website.
 

Session title: Cap-and-Trade Systems for Hazardous Chemicals: Defining Caps, Allocation Weights, and Implementation Pathways

Session Description
Hazardous chemicals in products and materials are a major barrier to achieving a safe, sustainable circular economy. Current regulations for hazardous chemicals, called “substances of very high concern” under REACH, are primarily based on bans and use restrictions. This often fails to sufficiently incentivize rapid phase out and substitution. As a result, material flows are contaminated, recycling processes are disrupted, and people and ecosystems are unnecessarily put at risk.

The EU Emissions Trading System (ETS) and the F-gas Regulation show that market-based cap-and-trade systems can deliver measurable and fast reductions, while allowing flexibility for regulated actors. In these systems, a total cap is set and reduced over time, with allowances transferable between participants, which helps to achieve targets cost-effectively and with broad stakeholder acceptance. If adapted to hazardous chemicals, such an approach could create incentives for earlier substitution, stimulate innovation, and enable reductions where they are most feasible, while complementing existing regulatory tools.

However, adapting cap-and-trade to groups of hazardous chemicals introduces specific challenges, including defining scientifically robust allocation weights for diverse hazard profiles (analogous to CO₂-equivalents) and determining pragmatically feasible caps that are protective for human health and the environment.

This session invites abstracts on:

• Methods for defining allocation weights across chemical groups based on hazard and/or risk profiles.
• Approaches to cap-setting that balance environmental ambition with industrial feasibility.
• Modelling of environmental, health, and economic impacts of chemical cap-and-trade systems.
• Lessons from ETS, F-gas quotas, and other transferable quota systems for application to chemicals.

By convening environmental scientists, economists, policy-makers, and experts from industry, and NGOs, this session will explore how cap-and-trade for chemicals could bridge the gap between regulatory intent and real-world substitution, and inform the design of effective, science-based market instruments for chemical management.

Chairs

• Daniel Slunge (University of Gothenburg, Sweden) – Environmental Economics and Policy
• Thomas Backhaus (RWTH Aachen University, Germany) – Ecotoxicology and Chemical Risk Assessment
• Marlene Ågerstrand (Stockholm University, Sweden) – Regulatory Science and Stakeholder Engagement
• Matti Vainio (University of Helsinki, Finland) – Former Policy Maker at ECHA and the European Commission