EU emissions trading system (EU ETS)

The Emissions Trading System (ETS) is a market-based tool for reducing greenhouse gases that allows emissions rights to be traded. In the EU Emissions Trading System (EU ETS), companies from industry and aviation receive emission certificates that determine their permitted emissions. These certificates can be traded to create incentives for emissions reductions. If companies exceed their emission limits, they must pay fines or purchase additional certificates. The EU ETS plays a key role in the EU climate strategy and promotes investments in green technologies.