Carbon emissions trading and reporting schemes

European Union Emissions Trading System (EU ETS)


Emissions trading is a key policy measure being used to help the European Union to meet their emissions reduction targets.

What is the EU ETS?

The European Union Emissions Trading Scheme (EU ETS) is a cornerstone of the EU's policy to combat climate change and its key tool for reducing greenhouse gas emissions cost-effectively. It is the world's first major carbon market and remains the biggest one.

The EU ETS can affect businesses from energy-intensive sectors such as the energy industry and certain manufacturers.

Under the Northern Ireland Protocol, electricity generators in NI remain within the EU ETS.

For other sectors within scope, the United Kingdom Emissions Trading Scheme (UK ETS) has replaced the EU ETS – find out more about your obligations under the UK ETS.

How to comply with the EU ETS

To comply with the EU ETS, your installation must legally hand over (surrender) enough allowances to cover your emissions from the previous year. Allowances are issued every February for the following year.

The deadline for surrendering allowances is 30 April every year. Failure to comply is met with financial penalties - €100 for every tonne of CO2 for which you fail to surrender allowances - plus you have to make up for the shortfall the following year.

Find out more about the EU ETS on the European Commission website.