The Compliant Market (or regulated market) involves companies, governments or other entities that buy carbon offsets in order to comply with regulations on the total amount of carbon dioxide they are allowed to emit. Examples of the regulated market are the European Union Emissions Trading System or EU ETS. All companies which abide by these systems are obligated to meet specific carbon emission reduction targets.
These carbon credits are generally referred to as Certified Emissions Reductions or (CERs).
In general 1 CER represents 1 ton of carbon dioxide equivalent reduction or avoidance.
The vast majority of CERs are created through technology transfers and by fuel-switching from carbonaceous fossil fuels to cleaner renewable energy sources.
A common example would be that of a manufacturer powered by the burning of oil, switching to a cleaner power source like hydro power.
Currently many countries are looking to implement some form of compliant market, including the U.S.A. and Canada.
