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EU ETS

EU-Specific

EU Emissions Trading System — the EU's cap-and-trade carbon market for greenhouse gas emissions from large industrial installations.

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Sources

  1. EUR-Lex — Directive 2003/87/EC (EU Emissions Trading System) eur-lex.europa.eu accessed 22 September 2026

The system rests on Directive 2003/87/EC of 13 October 2003, whose Article 1 states that it “establishes a scheme for greenhouse gas emission allowance trading within the Community … in order to promote reductions of greenhouse gas emissions in a cost-effective and economically efficient manner.” Cost-effective is the design choice: rather than prescribing each plant’s cuts, a cap and tradeable allowances let reductions happen where they are cheapest. The directive has been amended many times since 2003.

Quoted from the directive on EUR-Lex; read the consolidated, amended text for current obligations.

Related terms

From the AJG lexicon archive (July 2026).

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