The EU Emission Trading Scheme (EU ETS) started on the first of January 2005. This scheme is an implementation of the Kyoto Protocol three years prior to the period 2008-2012 for which the European Union will have to meet legally binding greenhouse gas emission reductions under Kyoto.
Under the first Phase of the EU ETS, only emission of CO2 is capped and the number of sectors included is limited compared with Kyoto. The EU ETS will cover a total of 12,000 installations in the 25 member countries. The penalty for non compliance is set to 40 ¤/tonne.
In Phase two, the first commitment period under the Kyoto Protocol, the EU is faced with stricter emission obligations. Under the Kyoto Protocol, the emission of five more Greenhouse gases is capped in addition to CO2. These gases are Methane (CH4), Nitrous Oxide (N2O), hydro fluorocarbons (HFCs), per fluorocarbons (PFCs) and sulphur hexafluoride (SH6). The reduction obligations are related to the emission level in 1990. Phase two also include the chemicals, transport and aluminium sectors. The penalty for non compliance will be 100 ¤/tonne.
EU ETS