EU ETS
The EU Emissions Trading System is a cap-and-trade scheme that puts a price on carbon for large emitters. The cap on total emissions falls over time, and covered installations must surrender allowances for every tonne of CO₂ they emit — making efficiency a financial issue.
Under the EU ETS, a shrinking number of allowances is issued and traded, creating a market carbon price. Power and energy-intensive industry are covered, free allocation is being phased down and the CBAM extends carbon costs to certain imports. For operators, every tonne of fuel saved also avoids an allowance cost.
Related terms
CBAM (Carbon Border Adjustment Mechanism) · Carbon Intensity · Industrial Decarbonization
Related guides
The EU ETS explained for industrial operators
How the EU Emissions Trading System works, who it covers, and why the rising carbon price makes industrial efficiency a financial issue, not just an environmental one.
Factory decarbonization: a practical roadmap
A sequenced, no-regrets roadmap for cutting industrial emissions — efficiency first, then electrification and fuel switching, then the hard residual.