The European Union Emission Trading Scheme (EU ETS) is the world’s oldest international emission trading initiative, established in 2005. It plays a pivotal role in the EU’s climate change mitigation efforts by targeting greenhouse gas emissions. Operating on a ‘cap and trade’ principle, the EU ETS covers emissions from energy-intensive sectors, reducing emissions by incentivizing companies to stay within their allocated emission allowances or trade unused allowances to others. This approach has yielded substantial results, with emissions in the covered sectors reduced by 43% since 2005. Currently covering about 40% of the EU’s emissions, the EU ETS continues to evolve, aligning with ambitious climate targets, and reflecting the EU’s commitment to combat climate change.