Environmental guidance for your business in Northern Ireland & Scotland

EU Emissions Trading Scheme

Climate change is a global problem. Under the Kyoto Protocol, by 2012 the European Union (EU) member states agreed to reduce emissions of greenhouse gases - such as CO2 - by 8 per cent below 1990 levels. The UK agreed to reduce its emissions by 12.5 per cent by 2012.

Emissions trading - such as the EU Emissions Trading System (EU ETS) - is a key policy measure being used to help the EU (and UK) to meet their emissions reduction targets. The EU ETS can affect businesses from energy-intensive sectors such as the energy industry and certain manufacturers. If your business is covered by the EU ETS, you must meet targets by either cutting your business' emissions or by trading allowances.

The EU Emissions Trading System has been revised through the adoption of Directive 2009/29/EC. The revised Directive took effect from 1 January 2013 and runs to 31 December 2020. It introduces significant changes to the scope of the EU ETS, as well as changes to operator entitlement to free allowances and how they will be issued.


Large organisations not covered by the EU ETS are covered by another scheme called the CRC Energy Efficiency Scheme (CRC). This was previously known as the Carbon Reduction Commitment.

This guide explains how the EU ETS works, which businesses are affected and how they can comply.

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