The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

Cut down or buy up

back to What price global warming?

The European Emissions Trading scheme is the first international trading system of CO2 emissions in the world. It will cover all 25 EU member states, affecting some 12,000 to 15,000 installations. The scheme will be implemented in two phases: 2005-07 and 2008-12, with the latter coinciding with the first commitment period under the international Kyoto Protocol.

The first period will cover such sectors as utilities, refineries, cement, glass, ceramics and the pulp and paper industries. The second phase will include greenhouse gases other than CO2, making emitters from other industrial sectors, such as aluminum and chemicals, potentially liable.

An operator holding a greenhouse gas permit will be allocated a number of emission allowances at the beginning of each trading phase. The scheme is designed to offer fewer emission allowances than would be needed to permit CO2 emissions to continue at their prevailing levels. Each operator is then faced with a choice of either reducing its own installations' actual emissions or buying allowances freed up by companies that have achieved emission reductions elsewhere on the open market. This “cap and trade” scheme will be open to the entire EU so that a company is free to trade with any other company in any other member state.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree