The directly elected legislative body of the European Union, representing EU citizens and participating in the legislative process alongside the Council of the European Union.

A market-based mechanism designed to reduce greenhouse gas emissions. Under this scheme, a cap is set on the total amount of emissions that can be released by covered entities, such as industries or power plants. Emission allowances are issued, each representing the right to emit a specific amount of greenhouse gasses. By creating a market for emission allowances, the ETS incentivizes emission reductions while providing flexibility for businesses to find the most cost-effective ways to comply with emissions targets.

The yearly limit set on the total amount of greenhouse gas emissions that can be produced by entities covered by the Emissions Trading System. The limit is reduced every year at a predetermined rate, currently at 4.3%.