The European Union Emissions Trading System (EU ETS) is one of a number of measures used by the EU to reduce greenhouse gas emissions and combat the global threat of climate change. The system is designed to help meet the EU’s targets set in the Kyoto Protocol. The first phase began in January 2005 and ran until December 2007.
The second phase runs to coincide with the first phase of the Kyoto Commitment Period 2008-2012.
In Phase I and II of the system the emphasis will be on Carbon Dioxide (CO2) reductions, but other greenhouse gases such as Methane (CH4) and Nitrous Oxide (N2O) may be introduced in Phase III.
Each EU Member State must decide how to apportion their allocation of allowances in a National Allocation Plan (NAP).
The commission has approved the Phase II UK NAP which is available from the Department Energy and Climate Change (DECC) UK National allocation Plan page
In Phase II of the system, existing operators will receive allowances based on their historical emissions. New Entrants to the system will have to apply for an allocation through the phase II New Entrant Reserve (NER). NER Guidance and application forms are available from our Application forms and Guidance page.
Schedule 1 of 'The Greenhouse Gas Emissions Trading system Regulations 2003' sets out the Activities and Specified emissions covered (.PDF 15.64Kb). Any installation carrying out a Schedule 1 activity must have a Greenhouse Gas Emissions Permit.
Phase III free allocation
The UK submitted its National Implementation Measures to the European Commission on 12 December 2011. The allocations have been determined in accordance with EU harmonised rules, using data provided from operators of EU ETS Phase III installations in 2010/11. This can be viewed on the DECC Website.
Consultation on the first stage Transposition of the revised EU ETS Directive
The purpose of this consultation is to seek views on a draft Statutory Instrument to transpose the first stage of European Union Directive 2009/29/EC and can be viewed on the DECC website.