European Emissions Trading System and CO2 certificates

Carbon dioxide emission allowances under the EU ETS come from the annual allocations by the European Commission to ETS countries and to specific installations (EUAs). They also originate from CO2 and other greenhouse gas emission reduction programmes developed under UN mechanisms such as the CDM (Clean Development Mechanism for CERs and JI (Joint Implementations for ERUs).

It is important not to confuse carbon allowances and carbon certificates with green certificates. The latter applies to certificates obtained by units producing renewable or green energy.

The allowances traded under the EU ETS include:

  • EUA – Emission Unit Allowance (current allowances for installations covered by the ETS)
  • UAA – European Union Aviation Allowance (allocations for European airlines)
  • CER – certified emission reduction (units or allowances from CDM emission reduction projects)
  • ERU – Emission Reduction Unit (units or allowances from JI emission reduction projects)

EUA trade has developed due to the existence of a surplus or deficit in GHG emissions against the initial ceiling set at European level. ETS installations that have a surplus of EUA as a result of low emissions compared to the assigned level are allowed to sell this surplus of EUAs. Similarly, units with an EUA deficit, determined by higher production and higher CO2 emissions, have to purchase EUAs to meet the requirements at the end of the accounting year (the end of April each year). The same applies to airlines, which follow the same mechanism of selling and buying EUAA allowances.

In quantitative categories: 1 EUA = 1 EUAA = 1 CER = 1 ERU = 1 ton of CO2

However, their value varies due to several factors and the volatility of the price of each allowance is very high, even over the course of one day of open trading.

What shall we do?

Should you need knowledge and information about carbon trading under the EU ETS, we are readily available with comprehensive services in this domain. We offer a broader view of the international carbon market and we will advise you in choosing the types of transactions that best suit your needs.

Our strengths are the ability to predict trends in the energy market and the international carbon market, deep knowledge of the objective and subjective factors influencing the fluctuation of the energy prices and carbon dioxide emission allowances, a thorough understanding of EU legislation and the international climate goals set by the year 2050.

The partners of wefacilitate are part of a small group of independent international consultants operating in the United Nations Convention on Climate Change (UNFCCC) in the last decade. The combined experience, access to knowledge and information can be very valuable for customers who wish to trade in CO2 allowances, voluntary carbon credits or measure and compensate for their carbon footprint.

wefacilitate, along with a team of partners operating in Amsterdam, Romania, Bulgaria, Switzerland and France, is available to assist with CO2 trading under the European Emissions Trading Scheme to maximise the benefits and comply with legal requirements while focusing on the core business.

Transactions on the European CO2 allowance market 

Advice and information

Measuring carbon footprint 

Carbon footprint off-set projects in the organisational project portfolio

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