The emissions trading system (ETS) introduced in Europe takes into account the CO2 emissions at the production / generation sources. While this would be fine for sectors with only local interactions, e.g. Transport, heating, etc., it will be difficult for internationally traded products.
A study by TU Graz shows how wrong our assessments are. They compared the CO2 footprint per inhabitant based on local production with local consumption. The results show that, taking into account the CO2 consumption factor, Germany's CO2 footprint would be 50% higher. It also shows the weakness of the system as it penalizes local production and stimulates the import of carbon intensive products like metals.