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ClimateAction©iStockEUETSHandbook1/138ContentsUsingtheguide3WhatistheEUETS?4Benefitsofcap-and-trade5HistoryoftheEUETS7EUlegislativestructureandtheEUETS9HowdoestheEUETScontributetomeetingtheEU’sclimatepolicygoals?12HowdoestheEUETScontributetoacompetitiveeconomy?14HowdoestheEUETSwork?16MainEUETSfeaturesovertheyears18Designstructure20WhatGHGemissionsdoestheEUETScover?20WhatisthecaponGHGemissions?22Howareallowancesallocated?24Howallocationhasevolved26AuctioningintheEUETS28Auctioningbodiesandvenues29Distributionofauctioningrights31Auctioninginpractice32Useofauctionrevenues35Transitionalfreeallocationformodernisationofthepowersector(Article10c)36NER300fundfordemonstrationprojects38FreeallocationintheEUETS40Timingofdeterminingfreeallocation41Freeallocationshiftscompliancecosts42FromnationalallocationtoEU-wideallocation;NAPstoNIMs43Calculatingfreeallocationusingbenchmarks44Limitontotalfreeallocation:Correctionfactors46Whatisabenchmark?47Theprocessofdevelopingthebenchmarks48Productbenchmarkcurv
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