European Union – Emissions Trading Scheme (EU-ETS)

European Union – Emissions Trading Scheme (EU-ETS) is cap and trade system that caps the total amount of greenhouse gases that can be emitted from factories, power plants and other installations. Within this restriction, companies receive emission allowances, which they can sell to or buy from one another when needed. At the end of each year, a company must possess enough allowances to cover all its emissions otherwise heavy fines are imposed. If a company manages to reduce its emissions, it can keep the allowances for future or can sell to another company that is short of allowances.

The EU-ETS covers the cement, paper and pulp, iron and steel, glass, bricks and ceramics sectors as well as power plants, oil refineries and combustion plants. The EU-ETS has encouraged the industries to reduce emissions by providing them room for substantial financial gains as well as by making them responsible for social sustainability. The EU ETS covers some 11,000 power stations and industrial plants in 30 countries. (EU ETS, 2011). European Commission also published a sector-specific guidance on the harmonized free allocation methodology for the EU-ETS post 2012. The benchmark figures for relevant industries are as following:

  • Grey cement production = 0.766 allowances/ton of clinker;
  • Whie cement production = 0.987 allowances/ton of whte cement clinker;
  • Liquid iron saturated with carbon for further processing = 1.328 allowances/ton of hot metal; 
  • EAF high carbon steel = 0.283 allowances/ton of crude secondary steel;
  • Long fibre Kraft pulp = 0.06 allowances/ton of air dried pulp;
  • Short fibre Kraft pulp = 0.12 allowances/ton of air dried pulp;
  • Sulphite pulp, thermo-mechanical and mechanical pulp = 0.02 allowances/ton of air dried pulp;
  • Recovered paper pulp = 0.039 allowances/ton of air dried pulp;
  • Coated fine paper = 0.318 allowances/air dried ton of paper;
  • Bottles and jars of coloured glass = 0.306 allowances/ton of packed product
  • Bottles and jars of colourless glass = 0.382 allowances/ton of packed product
  • Float glass = 0.453 allowances/ton of glass exiting the lehr. (European Commission 2011).

European Union – Emissions Trading Scheme (EU-ETS) Information


European Union

European Union – Emissions Trading Scheme (EU-ETS)Resources