This report analyses the implications for the Phase II carbon market and the resulting industrial abatement incentives and the wider lessons to be learned from the allocation process. This report, based on collaborative research with Climate Strategies, examines the workings of the EU ETS to date and offers analysis and recommendations on its future development. The study identifies seven key challenges to overcome for the second phase of the EU ETS and sets out the Carbon Trust's own conclusions and recommendations for the future of the EU ETS as an instrument that can both help business deliver emission reductions as efficiently as possible, and also protect and ultimately enhance business competitiveness in a CO 2 -constrained world.
Continue Find out more. Contact us Live Chat. Please tick to subscribe to our newsletter sent every two months. See further details below on: During this phase, every EU member state: Operated the Scheme Installations were obliged to monitor and report verified carbon emissions At the end of each year, installations were obliged to surrender sufficient allowances to cover their emissions and could buy additional allowances or sell any surplus Joint Implementation JI and Clean Development Mechanism CDM credits could be used within the scheme, through the 'Linking Directive', agreed in How the EU ETS works now Phase III started in and run until The biggest changes in Phase III are: Design A centralised EU-wide cap on emissions is set.
For some sectors, it will include the emission of other greenhouse gases in addition to carbon dioxide. The scheme was also meant to be extended to the aviation industry from January , covering all flights taking off and landing in the EU, including those originating from or travelling to non-EU countries.
However in November the European Commission decided to defer the extension of the scheme to extra-EU flights until after the International Civil Aviation Organization ICAO General Assembly in Autumn , on the expectation that a global agreement on greenhouse gas mitigation from aviation will be reached.
Opt-out DECC has introduced an opt-out provision for small emitters and hospitals in the UK, allowing them to move to a more "light-touch" scheme with lower administrative costs which hit disproportionately smaller companies.
The opt-out will deliver an equivalent carbon reduction. Cutting Carbon in Europe: The European Emissions Trading Scheme:More...