Number: RL33581
Title: Climate Change: The European Union's Emissions Trading System (EU-ETS)
Authors: Larry Parker, Resources, Science, and Industry Division 
Abstract: The European Union's (EU's) Emissions Trading System (ETS) is a cornerstone of the EU's efforts to meet its obligation under the Kyoto Protocol. It covers more than 11,500 energy intensive facilities across the 25 EU member countries, including oil refineries, powerplants over 20 megawatts (MW) in capacity, coke ovens, and iron and steel plants, along with cement, glass, lime, brick, ceramics, and pulp and paper installations. Covered entities emit about 45% of the EU's carbon dioxide emissions. The trading program does not cover emissions of non-CO2 greenhouse gases, which account for about 20% of the EU's total greenhouse gas emissions. The first trading period began January 1, 2005. A second trading period is scheduled to begin in 2008, with a third one planned for 2013. In deciding on its trading program, the European Commission (EC) adopted a "learning-by-doing" approach to prepare the EU for the Kyoto Protocol's emission limitations. The EU does not have major experience with emissions trading, and the EC felt that an initial program beginning in 2005 would give the EU practical familiarity in operating such a system.
Pages: 23
Date: July 31, 2006