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The EU ETS Directive is the centrepiece of the European Union’s climate policy. It has created the European Union’s Emissions Trading Scheme (EU ETS), which is a unique and quite com-plex system.
The EU ETS establishes a scheme for greenhouse gas emissions allowances trading within 31 European countries. Its functioning is based on a “cap and trade” principle, which sets a cap on the total amount of greenhouse gases that can be emitted by all participating installations. Within the cap, companies receive or buy emission allowances which they can trade with one another as needed.
Today, the EU ETS covers almost half of EU’s emissions and is part of the daily life of a large number of companies.
The EU ETS Directive represents the backbone of EU’s action against climate change, but it also works in combination with several other pieces of legislation in a delicate balance.
Our European system has very much evolved during the last 15 years. The existing legislation operates until 2020. It has set a greenhouse gas emissions reduction target in line with EU’s 2050 low carbon economy roadmap. The time has also come to discuss the post-2020 period and the European Commission will soon put forward a new proposal with a 2030 emissions reduction target.
Being the first one to have been setup, the European scheme is analysed and taken as exam-ple in other regions of the world where emissions trading starts being implemented.
This course aims at giving a presentation of the EU ETS Directive, the main features of the sys-tem, the balance with other pieces of EU legislation and at offering perspectives for the on-coming review of the scheme.
Introduction to the EU Emission Trading System - Part 4 electricity supply |
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