The EU Emissions Trading System (EU ETS)

The EU ETS is a market-based instrument which has existed since 2005. It is based on setting a cap for total emissions within the EU. The system has been developed over the years with the constant aim of reducing climate impact and achieving the set climate goals.

Emissions trading is regulated by EU directives and regulations.

According to the EU Emissions Trading Directive, each Member State is obliged to establish and maintain a national registry in order to ensure the accurate accounting of the issue, holding, transfer and cancellation of allowances. The Union Registry is the EU's common IT platform for national registries.

The Swedish Energy Agency is the national administrator for Sweden in the EU Emissions Trading System (EU ETS) and is responsible for the administration of the Swedish part of the Union Registry.

Emissions trading includes the EU ETS (ETS1), ETS2 and CBAM.

• The EU ETS (ETS1) regulates the trading of emission allowances for carbon dioxide emissions from manufacturing industries and facilities that produce electricity and heat, as well as aircraft operators and maritime operators.
• ETS2 regulates the trading of emission allowances from the combustion of fuels in road transport, residential buildings and commercial or public buildings. It also covers parts of the energy, manufacturing and construction industries not already covered by the EU ETS (ETS1).
• CBAM (Carbon Border Adjustment Mechanism) establishes that importers who bring certain goods into the EU from other countries must, from 1 January 2026, declare and purchase certificates for the greenhouse gas emissions associated with the goods. CBAM is administered by the Swedish Environmental Protection Agency.