The European Union’s Emissions Trading System (EU ETS) is one of the main tools with which the EU hopes to combat global heating and reduce greenhouse gas (GHG) emissions cost effectively. The EU ETS is meant to apply the ‘polluter pays principle’, meaning that the cost of pollution should be borne by those who create it. The EU ETS covers emissions from electricity and heat generation, energy intensive industries, aviation and, from 2024, shipping.