On 1st June the Netherlands launched a unique emissions trading system for nitrogen oxides. Nitrogen oxides cause acidification and smog. Within the framework of the EU, the Netherlands has agreed to further reduce nitrogen oxide emissions. Under this agreement, nitrogen oxide emissions in the Netherlands may not exceed 260 kilotons in 2010.

The emissions trading system is a new tool for reducing nitrogen oxide emissions. Companies that produce large quantities of nitrogen oxides can now begin trading in nitrogen oxide emissions rights. Particularly heavy industry, where businesses such as refineries, power stations and chemical companies consume a great deal of energy, produces large amounts of nitrogen oxides. The trading system allows businesses to accrue nitrogen oxide emissions rights based on how much energy they consume. At the end of each year, the businesses are required to turn in emissions rights equivalent to the amount of nitrogen oxides produced.

However, those businesses that produce more nitrogen oxides than their emissions allowance have two choices open to them. They may either take steps to reduce the emissions or they can buy extra emissions rights within the emissions trading system from businesses that have achieved their targets. It is easier for some businesses than for others to take steps to reduce nitrogen oxide emissions. For instance, some businesses that took steps in the past even have an emissions allowance surplus. In taking advantage of this surplus, businesses can engage in cost-effective trading. In order to participate in emissions trading, businesses need an emissions permit from the Netherlands Emissions Authority (NEA). In all, some 260 businesses will participate in nitrogen oxide emissions trading.

Acknowledgement
The information contained in this article is based on texts published in the VROM website: http://www.vrom.nl/international/. VROM is the Netherlands Ministry for Housing, Spatial Planning and the Environment.