Home > Focus Areas > EU Emission Trading Scheme

Focus Areas : EU Emission Trading Scheme

The European Union Emissions Trading Scheme (EU ETS) is the largest multi-sector cap-and-trade program currently in effect. Created in 2005, the EU ETS quickly became the pillar of the EU climate policy and the largest functioning carbon market. It currently covers carbon dioxide emissions from around 12,000 installations in the power and energy-intensive industry sectors. The EU ETS will be further expanded in coverage with the inclusion of the aviation sector in 2012 and of aluminium and ammonia producers in 2013, year in which the program will begin its third phase. 

With the third phase come several changes to the rules governing the EU ETS, including the manner of allocation of allowances to regulated entities, the criteria applicable to the use of international offsets, the possibility to generate domestic credits, the operation of a Community-wide electronic registry, and overall market regulation to counter collusive and fraudulent behavior of market players. Climate Focus follows closely these and other EU ETS developments and assists European and international companies in understanding the new rules and formulating effective compliance, hedging and/or business strategies for greenhouse gas emissions.   

Climate Focus provides consultancy to major European utilities, industries and financial institutions operating under the EU ETS, as well to international investors seeking to further understand and enhance their participation in the international carbon market. Examples of activates and projects include:

• Analysis of the quantitative and qualitative criteria applicable for the entry of international offset credits into the EU ETS
• Assessment of the potential for the generation of domestic offsets under rules governing the third phase of the EU ETS
• Summary of the rules applicable for new entrants and shutdown facilities in the different EU Member States
• Analysis of the rules governing the carry-over of CERS and ERUs between years and trading  of the EU ETS