EU Emissions Trading System – Policy, Landscape, and Market Report
Executive Summary, December 2025
This report provides an analysis of the framework of the EU Emissions Trading System (ETS), including the current state of the policy environment, its evolution, timeline of the future developments, and the compliance measures. Furthermore, it tackles the stakeholder environment on the EU and national level.
Part of this report dedicated to policy analysis maps the development and phases of the ETS framework since its establishment by the Directive 2003/87/EC (ETS Directive) and identifies additional regulatory measures. The report further dives into the scope of EU ETS framework, the Cap-and-Trade principle, auctions, trading, and allocation of emission allowances, and the ETS 2 framework, which is expected to be implemented soon but has been under scrutiny. The role of the European Commission, Member States, administering and competent authorities, and verifiers in the compliance cycle is tackled as well.
Furthermore, the report analyses the gradual inclusion of the maritime sector into ETS and Monitoring, Reporting and Verification (MRV) frameworks, the timeline of this extension, and the compliance cycle based on the existing ETS legislation together with MRV Maritime Regulation (Regulation (EU) 2015/757).
An analysis of the state-of-the-art is also provided which discusses the applications of EO for ETS, including remote sensing technologies for monitoring key greenhouse gases, operational EO-based MRV systems such as CAMS, and the role of current and upcoming satellite missions like Sentinel-5P, Sentinel-5, and the CO2M constellation in enhancing emissions transparency and verification.
The report also provides a gap analysis, covering regulatory, economic, and technical gaps, and a market sizing exercise to quantify the current value of EO data and services for EU ETS implementation and compliance. This market sizing is based on publicly available market and policy sources and highlights how regulatory developments are driving demand for EO-enabled compliance solutions across the EU.
Finally, the report provides a list of recommended actions/interventions that could further encourage the inclusion of EO-based MRV solutions under ETS.
If you wish to engage with the SEF team further about this topic, please contact us at esa-sef@evenflow.eu.
