European Emissions Trading Scheme (EU ETS)
The European Emissions Trading Scheme (EU ETS) is a cap-and-trade scheme which began in January 2005 and is the largest multi country, multi sector emissions trading scheme in the world to date.
The EU ETS requires companies with regulated installations in participating countries to limit their emissions of greenhouse gases to allocated levels over the initial period 2005-2007 (the first phase) and into the second phase or Kyoto phase of 2008-12.
One EU Allowance (EUA) represents one tonne of carbon dioxide equivalent (tCO2-e) of greenhouse gas.
EUAs are traded in the over-the-counter (OTC) market as spot and forward contracts and on the European Climate Exchange (ECX) as futures and option contracts through the ICE platform for clearing.
Although the EU ETS has an underlying compliance focus there are a number of non-liable organsations including investment banks and carbon and hedge funds who buy and sell EUAs for trading and client purposes similar to other global financial commodities.
To participate in the EU Emissions Trading Scheme (EU ETS) entities require an EU ETS Registry account which is an online database which records all information on the allocation and movement of allowances and the verification and transaction history of trading in allowances.
Buyers and sellers of EUAs please
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to speak with one of our transaction team.
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