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European Union Emissions Trading System

The European Union Emission Trading System (EU ETS) was introduced by the European Union (EU). The system will help meet the EU’s targets to reduce carbon dioxide emissions under the Kyoto Protocol

It aims to encourage industries to invest in technology to reduce carbon dioxide emissions. It does this by putting a price on the emissions that large energy-intensive industries produce.

The scheme operates through the trade of allowances - one allowance is a tonne of carbon dioxide equivalent.

Any installation with combustion activity of 20 Megawatts (MW) or more is covered by the scheme.

The scheme is divided into phases:

  • Phase I ran for 3 years - 1 January 2005 - 31 December 2007;
  • Phase II runs for 5 years - 1 January 2008 – 31 December 2012; and  
  • Phase III runs for 5 years - 1 January 2013 – 31 December 2016.

The EU ETS is administered by the Environment Agency.

For more information, visit the websites listed below.

Visit: Department of Energy and Climate Change (external link)

Visit: Environment Agency (external link) 

Visit: European Commission (external link)