ETS Directive

The ETS Directive (Emission Trading System Directive) is a set of European Union rules that cap and regulate greenhouse gas emissions from certain industries, like power plants and factories. Companies receive or buy emission allowances, which grant permission to emit a specific amount of CO₂. If they emit less, they can sell their extra allowances; if more, they must buy additional ones. This system creates a financial incentive for businesses to reduce emissions, encouraging cleaner technology and helping the EU meet its climate goals efficiently.