European Union Emissions Trading System

The European Union Emissions Trading System (EU ETS) is one of a number of measures used by the EU to reduce greenhouse gas emissions and combat the global threat of climate change. The system is designed to help meet the EU’s targets set in the Kyoto Protocol. New entrants to the system or extension of an installations capacity may be entitled to a free allocation, but this must be applied for through the phase III New Entrant Reserve (NER) in ETSWAP.

Phase III free allocation

The allocations have been determined in accordance with EU harmonised rules. This can be viewed on the DECC website using the link below.

Approved allowances have been allocated to operators on an annual basis following the Commission notification to the UK Administrator on 18 December 2013. Details of the rules on ‘allocation and adjustment of allowances’ can be found in Schedule 6 of the Greenhouse Gas Emissions Trading Scheme Regulations 2012.

All applications, notifications and forms must be submitted through the online ETSWAP system.

Emissions trading registry

All transfers and the surrender of allowances take place on an electronic registry administered by the Environment Agency in the UK. Member States are required to establish and maintain a registry to manage the issue, holding, transfer and cancellation of allowances. All national registries across the EU are linked, to allow trading of allowances between EU states.

Guidance can be found on the GOV.UK website:

If you think that your installation may be covered by Schedule 1 of the Regulations, please contact us on 028 9056 9299 or email with your query.

Consultation on the future of UK carbon pricing

Published 2 May 2019                 Closed 12 July 2019

This consultation set out the UK government’s and the devolved administrations’ approach to UK carbon pricing once we have left the EU, and sought stakeholders’ views on the design of a future scheme.

Go to the consultation

Published 1 June 2020

The UK Government and Devolved Administrations (DAs) consulted in May 2019 on the future of carbon pricing in the UK. The response, published today, sets out decisions on the design and operation of a UK ETS.

To note:

“NI Electricity Generators shall remain in EU ETS by virtue of the Ireland / Northern Ireland Protocol”

Go to Consultation outcome.



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