The EU Emissions Trading System (EU ETS) is often referred to as a cornerstone of EU climate policy. It aims to reduce emissions by pricing greenhouse gas (GHG) pollution from the power, industry and aviation sectors. It not only seeks to promote investments in emission reductions by making energy-intensive business as usual expensive, but it also offers a great opportunity for the EU to shift funding from polluting activities to climate action, innovation and energy sector modernisation. It covers over 10,400 industrial and power installations and approximately 350 airlines, across the 27 EU member states, Iceland, Norway and Liechtenstein (and there is a link with the Swiss ETS).

This beginner’s guide to the EU ETS aims to build knowledge and understanding of Europe’s carbon market for civil society organisations who have little or no prior experience with EU climate policies, especially in countries in the EU neighbourhood. It provides introductory knowledge on how the EU ETS is designed and how it functions. Increased awareness should ultimately empower civil society to get involved in the ETS process and advocate for an effective and fair European carbon market.