EU Emissions Trading System

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The EU Emissions Trading System (ETS) is a Cap and Trade system implemented at the European level. Based on the polluter pays principle, the main objective of this system is to reduce greenhouse gasses and air pollutant emissions by implementing a system of yearly emissions quotas allocated for each company (the cap). On a common market based on the law of supply and demand, these quotas can be exchanged between companies (trade system) according to their needs. To ensure a the successful achievement of the objectives to reduce the emissions, the system includes more and more countries and companies each year.

The European Trading System (ETS), European Commission