Emissions Trading in Europe
The European Union Greenhouse Gas Emission Trading Scheme (EU ETS)
In January 2005 the European Union Greenhouse Gas Emission Trading Scheme (EU
ETS) commenced operation as the largest multi-country, multi-sector Greenhouse
Gas emission trading scheme world-wide.
The scheme is based on Directive 2003/87/EC, which entered into force on 25 October 2003.
Allowances traded in the EU ETS will not be printed but held in accounts in
electronic registries set up by Member States. All of these registries will be
overseen by a Central Administrator at EU level who, through the Community
independent transaction log (link valid from 1st January 2005 onwards), will
check each transaction for any irregularities. In this way, the registries
system keep track of the ownership of allowances in the same way as a banking
system keeps track of the ownership of money.
Approximately 12,000 installations across the 25 Member States of the European
Union are required to surrender allowances equal to their annual emissions of
CO2.
Each Member State will have its own national registry containing accounts which
will hold the allowances. These registries interlink with the Community
transaction log, operated by the Commission, which will record and check every
transaction.
Each of the 12,000 installations will need to have an
"operator holding account" in its national registry, into which its own
allowances will be issued. Any individual or organisation wishing to
participate in the market is able to open up their own "person holding account"
in any of the registries.
Source: IPCC
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