Energy Trading system

                                           Energy Trading system

   The EU Emissions Trading System is the world’s first multi-country emissions trading system. The European Union established a climate policy system in 2005 in order to achieve the carbon dioxide emission reduction goals established by the Kyoto Protocol.  The targets for the first commitment period of the Kyoto Protocol cover emissions of the six main greenhouse gases, namely: Carbon dioxide (CO2);Methane (CH4);Nitrous oxide (N2O);Hydrofluorocarbons (HFCs);Perfluorocarbons (PFCs); and Sulphur hexafluoride (SF6) It allocates the emission reduction goals under the Kyoto Protocol to each member state. Countries participating in the EU ETS must comply with In accordance with the provisions of the EU Greenhouse Gas Emissions Trading Directive, and with the goal of fulfilling the Kyoto reduction commitments and the reduction sharing agreement, we implement the planning work for the allocation of greenhouse gas emissions from emission sources under each country’s jurisdiction. Member states will then allocate it to each enterprise according to the national allocation plan to achieve the goal of reducing greenhouse gas emissions by 8% from 2008 to 2012 compared with 1990.

    The European Emissions Trading System (EU ETS) is a measure adopted by the European Union. One unit of EUA is equal to 1 metric ton of CO2 equivalent. By setting an overall emission cap and allocating emission credits to participants, these participants are then allowed to buy and sell emission allowances in the market. If a company’s actual emissions are less than its allocated allowances, it can sell the excess allowances; if its actual emissions exceed its allocated allowances, the company needs to purchase additional allowances to make up the difference.

    Trading platform EUAs are commodities that exist in the emissions trading login software in electronic form, rather than actual material commodities. Since energy futures exchanges or stock exchanges already have the relevant experience required for a trading platform, traders are allowed to trade in the market around the clock. Traders can trade through computers, mobile phones or other devices and obtain market conditions and price information in real time.

    The settlement stipulates the carbon dioxide emissions (European Union Allowance, EUA) of 12,000 companies and factories in the EU between 2005 and 2007. At the end of each year, the regulated companies or factories must report their own For the difference between emissions and quotas, if the emissions exceed the quota, the company will be fined 40 euros per metric ton, which is the most expensive emission quota currently on the market, and the excess emissions must still be made up in the next year.

Reference:

Emissions trading: 2007 verified emissions from EU ETS businesses. IP/08/787. European Commission Press Release. 23 May 2006 [25 March 2009].

European Commission Press Release. 14 March 2008

This article is a part of the class

“751447 SEM IN CUR ECON PROB”

supervised by

Asst. Prof. Napon Hongsakulvasu

Faculty of Economics,

Chiang Mai University

This article was written by yiwen Wang 631615523