Since 2005, as a result of the Kyoto treaty to reduce global warming, companies in EU member states have been able to trade emission permits for greenhouse gases. The governing directive came into force in 2003. The aim is to reduce climate-warming greenhouse gases in Europe. The idea of trading emission permits is that, in order to protect the climate, it does not matter where the emissions are reduced. It is only important that they are reduced.

The procedure involves a company being assigned the precise quantity of emission allowances that enables the respective EU member state to fulfill its individual reduction commitments in accordance with the Kyoto Protocol. Evidence is provided at a national level by comparing the actual annual CO₂ emissions with the emission allowances assigned by the authorities.