Cap and Trade Explain the concept of carbon credits

Emissions trading

Basic principle simply explained

Emissions trading is a market-based instrument with which the emissions of carbon dioxide (CO2) and other greenhouse gases, thereby protecting the climate. The principle is very simple: Politicians determine how many tons of CO2 may be expelled by a group as a whole. Who belongs to the group and the climate with CO2Emissions, now needs for every tonne of CO emitted2 an emission allowance. The group members can buy these authorizations, for example, at state-organized auctions. Is used without authorization CO2 issued, penalties are due. Who has little CO2 emitted, has to spend accordingly little on authorizations. Climate protection is therefore also financially worthwhile.

European Emissions Trading System (EU ETS)

The European emissions trading system has existed since 2005. All large systems for generating electricity and heat are obliged to participate in it. In addition, large industrial plants such as steelworks, refineries and cement works as well as - since 2012 - aircraft operators have to show authorizations for their emissions. A total of around 11,000 systems and several hundred aircraft operators across Europe are currently subject to emissions trading. In Germany, the EU ETS comprises almost 2,000 systems.

National emissions trading system

From 2021, a supplementary emissions trading system will be implemented in Germany for almost all other CO2-Emissions introduced from burning fossil fuels such as coal, oil and gas. This means that CO also applies to road traffic and heating2-Price. The obligation to surrender emission allowances does not, however, affect drivers or homeowners. Basically, it lies with the so-called "distributors", ie the companies that sell diesel, gasoline and the like in Germany for the first time.