The EU ETS
The European Union Emission Trading Scheme (EU ETS) is the world's largest and most effective greenhouse gas emissions trading system. Established in 2005, it currently encompasses 38% of the EU's gas emissions from over 10,000 installations. It takes into account emissions from the industry, power generation, aviation, and maritime transportation.
The scheme's purpose is straightforward: it is a practical tool to fulfill climate commitments. Europe will be carbon neutral by 2050 and will see its carbon footprint reduced by 55% until 2030. The EU-ETS enables regulators to control emissions and ensure that the bloc stays in line with these goals.
Since its inception, the EU ETS has grown increasingly robust and sophisticated. Regulatory adjustments have addressed market design imbalances, and sector expansions have gradually included more greenhouse gases. As a result, more participants are trusting and engaging in the carbon market, making medium- and long-term decisions based on the scheme's operation.
The European carbon market is both a policy tool and a marketplace - it is the best shot we have at collectively fighting climate change.