JI (Joint Implementation):

EUAs are the core allowance unit of the Kyoto Protocol at emitter level. They allow the bearer to emit 1 ton of Carbon Dioxide or equivalent into the atmosphere. Currently, only Annex 1 countries have committed to reducing their emissions. In addition, only the following industries are covered under the Kyoto Protocol; energy activities (combustion installations with a rated thermal input exceeding 20MW, mineral, oil refineries, coke ovens), production and processing of ferrous metals, mineral industry (cement clinker, glass and ceramic bricks) and pulp, paper and board activities.

Around 1500 companies are currently included covering around 45% of all of Europe's emissions. Annex 1 (developed nations) government's issue EUAs to companies within their territories under a National Allocation Plan (NAP). Because regional governments are responsible for the allocation (out of their overall governmental allocation), there is no guarantee that this will be done fairly. As such, it is most likely that governments will look more favourably at companies and industries that they believe exhibit competitive advantage over their trading partners. Their decision on allocation will of course also be based on that company's prior record of emissions. As the Kyoto scheme is a "Cap and Trade" Scheme, there is a ceiling to the amount of CO₂ that a participating company can emit. Above this amount they must purchase more permits through the market and below which, they are able to sell their emission allowances back into the market.

A complete set of spot and derivative instruments are available from TP Global Green to expedite this process. At the end of each year, participating firms must surrender emission permits equal to their pollutants to their respective government for cancellation. Failure to do so will result in a fine of €100 per tonne in addition to having to purchase the equivalent shortfall for retirement the following year.