Definition of EU emissions trading scheme

This is also known as EU ETS.  The European Union greenhouse gas emissions trading scheme was born on January 1 2005, and covers carbon dioxide emissions from six sectors of heavy industry, including electricity generation, steel-making, cement-making, pulp and paper, and glass. Companies covered by the scheme may emit only a certain quota of carbon dioxide each year, and are issued with carbon permits for every tonne of the quota. They can trade these permits with each other. In successive phases of the scheme, the quota is reduced so that the overall emissions fall. [1]

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