EU Emissions Trading System (ETS)

This is a European system for trading greenhouse gas emission allowances. It is part of the European Union climate action policies. It works by putting a limit, which is lowered over time, on the total greenhouse gases that can be emitted by:

  • airlines,
  • power stations, and
  • other large-scale industrial activites.

These are known as installations and there are about 100 installations coming under the EU Emissions Trading System in Ireland.

Under the system, the installations they receive or buy emission allowances. They can trade these with other installations as needed. Each emissions allowance is for one tonne of  CO2 equivalent.

Each year, an installation must have enough allowances to cover all of its emissions, or otherwise it is fined.


Related Terms



Carbon budgets

Cap and trade system

Carbon credits

Carbon neutral

Carbon tax

Circular economy


Climate change

Climate Action Delivery Board

Climate Action Fund

Climate Action Plan

Climate Action and Low Carbon Development (Amendment) Act 2021

Climate Change Advisory Council

Climate neutral economy

Climate resilience


Effort Sharing Regulation

Effort Sharing Legislation

Effort Sharing Decision

Electricity interconnector

Emissions projections

Environmental Protection Agency (EPA)

EU Emissions Trading System (ETS)

European Green Deal

Green economy

Greenhouse Gas Emissions / GHGs

Global warming potential (GWP)

LULUCF / Land use, land-use change and forestry

Intergovernmental Panel on Climate Change (IPCC)


National Energy and Climate Plan

National Retrofit Plan

Net zero emissions

NZEB ‘Nearly Zero Energy Buildings’

Paris Agreement

Renewable Electricity Support Scheme (RESS)

Renewable energy

Sectoral Adaptation Plans

Sustainable Development Goals (SDGs)

Sustainable Energy Authority of Ireland (SEAI)