Emissions Trading Directive

The aim of the EU Emissions Trading Directive (2003/87/EC) is to keep the emissions of the sectors covered by the EU emissions trading system (EU ETS) below the EU-wide cap on emissions.

The EU’s target for 2020 is to cut greenhouse gas emissions by 20% from the 1990s levels. This reduction will be achieved and the efforts shared by installations covered by the EU ETS and the sectors not in the ETS, i.e., the effort-sharing sectors. The target is that in 2020 the emissions from the ETS sectors will be 21% lower than in 2005.

The EU’s target for 2030 is to cut greenhouse gas emissions by 40% from the 1990s levels and share the effort between the EU ETS sectors and the effort-sharing sectors. In 2030, the emissions from the ETS sectors should be 43% lower than in 2005. The emissions cap will ensure that the target is achieved.

Since 2013, the allocation of emission allowances has been based on harmonised EU-level rules, and national allocation plans are no longer used. Auctioning is the default method of allocating allowances in the third and fourth phases of the EU ETS. Certain sectors get emission allowances for free based on the Emissions Trading Directive (2003/87/EC) and the Commission’s implementing legislation.

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