EU Emissions trading system—outline
EU Emissions trading system—outline

The following Environment practice note provides comprehensive and up to date legal information covering:

  • EU Emissions trading system—outline
  • Brexit impact
  • Details for emissions trading and carbon pricing
  • How does the EU ETS work?
  • Registries
  • Benchmarking
  • Market oversight

The EU emissions trading system (EU ETS) covers approximately 11,000 power stations and industrial plants in 31 countries (the 28 EU member states plus Iceland, Liechtenstein and Norway). It covers CO2 emissions from installations such as power stations, combustion plants, oil refineries and iron and steel works, as well as factories making cement, glass, lime, bricks, ceramics, pulp, paper and board. Nitrous oxide emissions from certain processes are also covered. Between them, the installations currently in the scheme account for almost half of the EU's CO2 emissions and 45% of its total greenhouse gas (GHG) emissions. Airlines were added to the scheme in January 2012.

Brexit impact

11 pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. Any changes relevant to this content will be set out below. For further guidance, see Practice Note: Brexit—impact on environmental law and News Analysis: Brexit Bulletin—key updates, research tips and resources.

Details for emissions trading and carbon pricing

For further information on the impact of Brexit on emissions trading and carbon pricing, see Practice Note: Brexit—emissions trading and carbon pricing.

How does the EU

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