Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive 2003/87/EC establishing a system for greenhouse gas emission allowance trading within the Union, Decision (EU) 2015/1814 concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme and Regulation (EU) 2015/757

1. On 14 July the European Commission unveiled its ‘Fit for 55’ package of energy and climate legislation, as part of its Green Deal roadmap. The package covers twelve new or amended legislative proposals to meet the EU’s new Nationally Determined Contribution (NDC) – a commitment to reduce emissions by at least 55% by 2030, based on 1990 levels. As part of this package, the European Commission have proposed to amend the EU Emissions Trading System (ETS) Directive to increase the traded sector’s share of emission reductions to 61% by 2030 against 2005 levels, up from the current target of a 43% reduction.

2. The EU ETS works on the “cap and trade” principle, where a cap is set on the total amount of certain greenhouse gases that can be emitted by installations covered by the system. This cap is then reduced over time, so that total emissions fall. Within the cap, participants buy or receive emissions allowances, which they can trade with one another as needed. The limit on the total number of allowances available ensures that they have a value (“carbon price”). Sectors currently covered by the EU ETS include electricity generation; energy-intensive industries; and aviation. Together, the sectors covered by the EU ETS currently account for around 41% of EU emissions. At the end of each reporting year, participants are required to surrender emissions allowances for every tonne of carbon dioxide equivalent (CO2e) they have emitted, to meet their EU ETS obligations.

Topic  Energy 
Department  DBEIS 
Council Reference  10875/21 
COM Reference  COM(21)551 
SEC Reference  SEC(21)551 
PE Cons   
JOIN   
SWD  SWD(21)557 
C Reference   

Associated file(s)


  1. 10875/21 - 1 MB - pdf
  2. 10875/21 + Add 1 - 461 KB - pdf
  3. 10875/21 + Add 2 - 561 KB - pdf
  4. 10875/21 + Add 3 - 3 MB - pdf
  5. 10875/21 + Add 4 - 3 MB - pdf
  6. 10875/21 + Add 5 - 2 MB - pdf
  7. 10875/21 + Add 6 - 2 MB - pdf
  8. 10875/21 + Add 7 - 360 KB - pdf
  9. EM 10875/21 - 158 KB - pdf

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