EU ETS - Implementation in Sweden

The EU Emissions Trading Scheme (ETS) is governed by the Emissions Trading Directive (2003/87/EC). Initially, trading only covers emissions of one greenhouse gas - carbon dioxide - from energy installations and certain energy-intensive industrial sectors.

The European Commission views trading in carbon dioxide emission allowances as an important way of achieving the EU's Kyoto commitment to reduce emissions. The objective is to create an efficient European market in greenhouse gas emission allowances with the least possible diminution of economic development and employment within the EU.

The first phase of the emissions trading scheme will run during the 2005-2007 period. For the next trading period, 2008-2012, individual countries and the EU may decide that the scheme is to cover further sectors and additional greenhouse gases besides carbon dioxide.

The regulations for the first period of emissions trading have been applied in Sweden through the Emissions Trading Act (2004:1199, Lag om handel med utsläppsrätter) and the Emissions Trading Ordinance (2004:1205, Förordning om handel med utsläppsrätter).

Application for allocation

In Sweden, the companies involved have been provided with the opportunity to apply for an allocated emissions allowance. Special allocation principles have been applied in considering each installation's application. Final decisions on allocations have been taken by the Environmental Protection Agency after consultations with the National Board for Industrial and Technical Development (NUTEK) and the Energy Agency. Emission allowances have then been allocated to the companies free of charge.

Emission allowances are accessed electronically via the Swedish Emissions Trading Registry, in which all participants must have an account to be able to register their transactions. The Swedish registry is known as the ETR and is linked to the CITL, which is the EU electronic registry. You will find information on companies and industries covered by the European ETS at the Commission's website.

A permit is needed

Swedish companies included in the trading scheme must, in accordance with the Directive 2003/87/EC, have a special permit to emit carbon dioxide from 1 January 2005, and nobody is allocated emission allowances without such a permit. Operators covered by the emissions trading scheme may not conduct their activity without a permit. To qualify for a permit, the operator must be able to reliably monitor and report emissions. The permits are processed by the County Administrative Board in the county/region in question.