How does the European carbon market work?

29 October 2015 - Foreword of the week

Managing greenhouse gas emissions plays an important role in helping our economies follow a low-carbon trajectory. The objective of an emissions trading scheme is to help incentivize economic players from main emitting sectors – such as energy and industry – to reduce their CO2e emissions.

I4CE – Institute for Climate Economics, IFP Energies nouvelles and ADEME (French Environment and Energy Management Agency) present key facts on the functioning of the largest and oldest emissions trading scheme in the world: the European Union Emissions Trading Scheme.

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Since 2005, the EU Emissions Trading System (EU ETS) has been a cornerstone of Europe’s climate policy. With the price per tonne of CO2 now beginning to stabilise at between €60 and €80, and the gradual reduction in free allowances, 2026’s review of the system should be an opportunity to reflect on and upgrade its performance as the EU continues towards climate neutrality.

How does the European carbon market work?

Public funding for the wood sector : what contribution to climate objectives?

Reinforcing Europe’s carbon sink through actionable levers

Stay the course: why a stronger ETS is the key to industrial competitiveness