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The project expands and develops the development of the EU emission trading system (ETS). New EU legislation introduced major changes to the existing ETS, including new allocation rules, the inclusion of aviation and the CCS directive. Ecologic Institute provides economic and legal analyses for the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety in the development and implementation of new concepts and legislation.

Emissions trading covers about 50% of all German greenhouse gas emissions and is one of the main climate protection instruments in Germany and the EU. The objective of the ETS is to mitigate greenhouse gas emissions efficiently. The EU established the ETS in the first trading period 2005 to 2007 and in 2009 adopted the CCS directive as well as major amendments of the emissions trading directive.The project provides expertise and develops options regarding the implementation of the EU-directives into national law as well as measures to be implemented through the comitology procedure at EU level. In addition, the project also develops proposals for the further development of German energy regulation with a view to achieving the climate objectives. This includes legal and economic analyses and support in respect of the inclusion of the aviation sector, free allocation and auctioning, monitoring and reporting, measure to support carbon leakage sectors and the regulatory framework for carbon dioxide capture, transport and storage (CCS).