In principle, emissions certificates give the holder the right to emit a certain amount of carbon dioxide or other greenhouse gases (EC, 2018a). Under the “cap and trade” principle, a cap is set for the total amount of GHG emissions for a given industry (EDF, 2018). The allowances are usually handed out to companies without charge (a procedure known as “grandfathering”), as companies start trading the certificates amongst each other. Over time, this cap is reduced gradually, so that overall GHG emissions decrease and companies are increasingly steered to invest in climate-friendly technology.