The EU Emission Trading Directive has created an EU-wide scheme, which has established a market for greenhouse gas emissions allowances. The scheme, which is one of the measures implemented at EU level to reduce greenhouse gas emissions, works on a 'cap and trade' basis allowing Member States' governments to place a cap upon the emissions from all the regulated installations.
What is their collective effect upon CCS activities?
From the start of Phase II of the EU Emission Trading Scheme (ETS) in 2008, Member States have had the option of including CCS projects under the EU ETS, subject to European Commission approval. However, CCS is given fuller recognition within the system under the revised EU ETS Directive, adopted in 2009, which will take effect from Phase III in 2013. The amendments to the regime introduced by the 2009 Directive will play a significant role in the financing of CCS activities, in particular through the funding of demonstration projects. The inclusion of CCS activities within the revised EU ETS means that emissions allowances need not be surrendered where CO2 is successfully captured and stored; those emissions will be counted as 'not emitted' (see below).
Relationship with other international or national laws
The ETS Directive is part of a suite of measures implemented by the European Union in order to meet its commitments under the various international climate change agreements. Further details of the international obligations may be found in the International Climate Change section.
Like all EU directives, the EU Emission Trading Directive must be implemented by the Member States, by means of transposition into national law.