EU emissions trading system (ETS)

The EU emissions trading system (ETS) requires the use of emission allowances to emit greenhouse gases. Emission allowances are limited in quantity and can be traded in the market. Emission trading systems encourage companies to reduce emissions where this is cheaper than the price of emissions allowances. The EU ETS covers electricity generation and large industry.

📖 Read more in our EPRS publication:
Review of the EU ETS: ‘Fit for 55’ package [EU Legislation in Progress][Policy Podcast]:

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