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The objective of this chapter is to assess whether the carbon‐energy taxes introduced under the environmental tax reforms (ETRs) that were implemented in seven European Union countries between 1990 and 2001 have had any impact on the competitiveness of selected industrial sectors in those countries. Underlying the analyses is a series of country datasets with each dataset containing generic data such as exchange rates and emission factors, and sector‐specific data on energy use, energy prices and taxes, economic variables, and labour market variables. By definition, if an ETR raises the production cost of a firm, or the average production cost for a sector, then it has a negative impact on competitiveness compared to the (hypothetical) situation if the ETR had not been implemented – all else being equal. However, from a policy perspective it is more relevant to consider whether there has been any deterioration in competitiveness compared to the (actual) situation before the ETR was implemented.