EU-implemented “carbon market” that works on the principle of ‘cap-and-trade’ setting an absolute limit (“cap”) on the total amount of certain greenhouse gases (GHGs) that can be emitted each year by the entities covered by the system. This cap is reduced over time so that total emissions decline over time. Companies can either invest in new technologies that produce less gas and sell surplus licenses for an additional profit, or they can purchase additional certificates to increase their ceiling (“trade”).
