EU Emission Trading Scheme (EU ETS)

What is EU ETS?

The EU ETS is a multi-country, multi-sector greenhouse gas (GHG) emissions trading system. It is the world’s biggest emissions trading market, accounting for more than three-quarters of international carbon trading. It covers more than 11,000 installations and 45% of EU emissions. The scheme targets energy-intensive business activities and covers approximately 1,000 sites in the UK. Its aim is to achieve emissions reductions by placing a limit on the total emissions related to each business sector, allocating emissions allowances and allowing them to be traded in an EU-wide carbon market.

The EU ETS is currently in its third phase, which started in 2013 and will continue until 31 December 2020.

Who needs to comply?

The EU ETS scheme is aimed at very large energy consumers that have significant on-site generation assets. Generally, sites where combustion of fuels has a total rated thermal input of more than 20MW will fall under EU ETS. Businesses affected include those in the oil, steel and cement industries, other energy-intensive manufacturing processes and large data centres with considerable standby generation assets.

How do you comply?

All participants must obtain GHG emissions permits to carry out activities covered by the EU ETS. Qualifying organisations are required to have a monitoring plan, approved by the regulator, which sets out how they will measure and report their emissions. The annual emissions reported must be verified by an independent verifier and, subsequently, participants are required to surrender allowances to cover their emissions for the compliance year.

Participants can acquire allowances through a mixture of free allocation, auctioning and trading. You can surrender all or part of your free allocation to cover your emissions, you can buy additional allowances or even sell surplus allowances if you manage to reduce emissions below your allocation level.

How can ENGIE help?

By choosing our EU ETS administration and monitoring service, you can considerably reduce the burden of EU ETS compliance, saving you time and resources. Our specialist compliance team will collect, analyse and store your data for electricity, gas and other fuel consumption each year. We will report on your emissions, surrender the required allowances and manage the external verification process on your behalf.

To ensure you meet EU ETS regulations, we will analyse and report on your historic emissions, and compile an evidence pack recording your energy use, GHG emissions and all relevant information. Our team will manage all correspondence with the regulator, as well as keeping you informed of any allowance buying or selling opportunities on the market, to ensure you get the best possible value from your participation in the scheme.

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