A competitive process in which goods or services are offered to potential buyers. Pre-determined mechanisms allow for the final allocation and the decision of the price level. This is the mechanism used by EU regulators to release EUAs in the primary market.

A European Union legislative package aimed at reducing greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels, covering various sectors to achieve the European climate goals.

The trading unit is the carbon allowance, which represents the right to draw 1 ton of carbon from a capped carbon budget. In compliance markets, a regulatory entity fixes a certain amount (the cap) of allowed emissions for the year (the budget), and industrial polluters need to purchase allowances equivalent to their emissions. There are only as many allowances as the budget allows: the supply is capped. It is a regulated market in the sense that buyers have an obligation to hold allowances in equivalence to their emissions. Allowances are standard units issued by the regulatory body.