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Energy & Renewables vocabulary · Emissions and Energy Policy

Emissions trading system

Meaning in energy & renewables, with examples

nounCommon term

In energy & renewables, emissions trading system means: A market-based scheme that sets a cap on total emissions and lets companies buy and sell allowances, each giving the right to emit one tonne of CO2.

In Turkish: emisyon ticaret sistemi, ETS

How it is used

Shortened to ETS; the approach is also called cap and trade. Companies surrender allowances for their emissions each year, and the cap falls over time. The EU ETS, launched in 2005, covers power plants, heavy industry and aviation. Turkey has also begun setting up a national ETS.

Example sentences

  1. Under the emissions trading system, the plant must buy extra allowances if it exceeds its free allocation.

  2. Allowance prices in the emissions trading system rose sharply this quarter.

Common collocations

  • EU ETS
  • emission allowances
  • cap and trade
  • free allocation
  • surrender allowances
  • carbon priceA cost put on each tonne of carbon dioxide emitted, through a carbon tax or an emissions trading system, to encourage companies to cut their emissions.
  • carbon emissionsCarbon dioxide released into the air, mainly by burning coal, oil and gas. The term is often used loosely for all greenhouse gas emissions.
  • greenhouse gasA gas in the atmosphere, such as carbon dioxide, methane or nitrous oxide, that traps heat and contributes to global warming.
  • decarbonizationReducing the carbon dioxide emissions of an economy, sector or company, for example by switching to renewable power, electrifying heat and transport and improving efficiency.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Emissions and Energy Policy

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