The EU carbon market is characterised by trades in 2 different commodities - EU Allowances (EUAs) and International Credits (CERs).
Article 3(a) of the EU ETS Directive defines an EU Allowance as "an allowance to emit one tonne of carbon dioxide equivalent during a specified period, which shall be valid only for the purposes of meeting the requirements of this Directive and shall be transferable in accordance with the provisions of this Directive".
EU Allowances are either issued directly to operators, sold through auctions or traded on the secondary market.
The EU ETS Directive also allows installations to 'exchange' International Credits - Certified Emission Reductions (CERs)* - for allowances in order to comply with their a portion of their target up to a limit set by the European Commission (EC) for Phase 3 (2013-2020).
Operators can check any remaining CER 'exchange' limit by logging into your EU ETS Registry Account and clicking on the "Holdings" tab - check the Remaining Entitlement in the ICH table at the bottom of the screen