European Emissions Trading Scheme

The European Union is leading global efforts to reduce greenhouse gas emissions from human activities that are threatening to cause serious disruption to the world’s climate. As the cornerstone of its strategy for cutting its own greenhouse gas emissions cost-effectively, the European Union has developed the EU Emissions Trading System (EU ETS).

Launched at the start of 2005, the EU ETS is the world’s first international company-level 'cap-andtrade' system of allowances for emitting carbon dioxide (CO2) and other greenhouse gases. Building on the innovative mechanisms set up under the Kyoto Protocol - international emissions trading, the Clean Development Mechanism (CDM) and Joint Implementation (JI) – the mandatory system has rapidly become the dynamo behind the expansion of the emerging global carbon market.