EUROPEAN UNIONEach allowance permits the holder to release one tonne of carbon allowance dioxide within the EU Emissions TradingA market-based approach to achieving environmental objectives that allows sources reducing emissions below their target to sell the excess reductions to offset emissions at another source. Scheme. Allowances are issued or sold to emitters by governments and must be surrendered annually to cover emissions during the past year. EMISSIONS TRADINGA market-based approach to achieving environmental objectives that allows sources reducing emissions below their target to sell the excess reductions to offset emissions at another source. SCHEMEAn EU-wide ‘cap-and-trade’ system for reducing CO2, which commenced in January 2005.

The European UnionEach allowance permits the holder to release one tonne of carbon allowance dioxide within the EU Emissions TradingA market-based approach to achieving environmental objectives that allows sources reducing emissions below their target to sell the excess reductions to offset emissions at another source. Scheme. Allowances are issued or sold to emitters by governments and must be surrendered annually to cover emissions during the past year. Emissions TradingA market-based approach to achieving environmental objectives that allows sources reducing emissions below their target to sell the excess reductions to offset emissions at another source. SchemeAn EU-wide ‘cap-and-trade’ system for reducing CO2, which commenced in January 2005. (EU ETSAn EU-wide ‘cap-and-trade’ system for reducing CO2, which commenced in January 2005.) was the first large-scale scheme to encourage emissions tradingA market-based approach to achieving environmental objectives that allows sources reducing emissions below their target to sell the excess reductions to offset emissions at another source. globally. The scheme, also known as the European UnionEach allowance permits the holder to release one tonne of carbon allowance dioxide within the EU Emissions Trading Scheme. Allowances are issued or sold to emitters by governments and must be surrendered annually to cover emissions during the past year. Emissions Trading System, is a key part of climate policy within the EU. The scheme is responsible for almost half of the EU’s carbon dioxideA naturally occurring gas and one of the most abundant greenhouse gases in the atmosphere. Carbon dioxide is also a by-product of industrial processes, burning fossil fuels and land use changes. emissions and as much as 40% of total greenhouse gas emissions.

How does the EU ETSAn EU-wide ‘cap-and-trade’ system for reducing CO2, which commenced in January 2005. work?

Under the EU ETSAn EU-wide ‘cap-and-trade’ system for reducing CO2, which commenced in January 2005., large-scale emitters of carbon dioxideA naturally occurring gas and one of the most abundant greenhouse gases in the atmosphere. Carbon dioxide is also a by-product of industrial processes, burning fossil fuels and land use changes. (inside the EU) have to monitor their emissions and report them on an annual basis. Each year their obligation to return emissions allowances (permits to emit pollutants) to the government that equal their CO2 emissions for the year.

So EU ETSAn EU-wide ‘cap-and-trade’ system for reducing CO2, which commenced in January 2005. emission credits are given out every year?

Because of the irregularity in carbon dioxideA naturally occurring gas and one of the most abundant greenhouse gases in the atmosphere. Carbon dioxide is also a by-product of industrial processes, burning fossil fuels and land use changes. emission levels, emissions credits under4 the EU ETSAn EU-wide ‘cap-and-trade’ system for reducing CO2, which commenced in January 2005. are provided for a sequence of several years. These are called trading periods.

So if as a company I have reduced carbon emissions, can I sell them?

The ability for companies to reduce their emissions and sell their credits for a profit is encouraged. Effectively, this increases the self-functioning of the emissions trading system and stops the need for government intervention.

How does the EU ETS work?

The EU ETS allocates and trades greenhouse gas emissions allowances throughout the EU. Every emission trade represents a single tonne of carbon dioxideA naturally occurring gas and one of the most abundant greenhouse gases in the atmosphere. Carbon dioxide is also a by-product of industrial processes, burning fossil fuels and land use changes.. The total amount of emissions allowed is capped by each government, with allowances distributed within the different installations.

So what do I need to do as a business?

If you are a polluter, you must make sure you have enough money to cover your emissions. You may purchase additional emissions permits or sell emissions permits gained from reducing emissions.

How does EU ETS affect my business?

EU ETS Directives mean that all businesses polluting (under Annex 1) must have a greenhouse gas emissions permit. This permit means that companies have to monitor and report emissions, and this data must be verified and allowances surrendered.