Offers Contracts for Difference (CfDs) in the electricity generation market for low carbon and renewable sources, CfDs will replace ROCs (which are due to be phased out to new capacity from 2017). Current policy offers CfD for new capacity through auctions should Government’s choose to hold them. There is also a bilateral negotiation underway for Hinkley point C Nuclear plant.

"An emissions trading system puts a limit, or cap, on emissions across the EU from the sectors covered. The EU emissions trading system (EU ETS) is the central common instrument for achieving the EU climate objectives. is an important component in Sweden’s efforts to limit greenhouse gas emissions. The system was introduced in 2005 and covers all EU countries as well as Iceland, Liechtenstein and Norway. The emissions trading system is based on supply and demand, and is a market-based system in which the price is set by the market. The trading system sets a ‘cap’ that is gradually reduced for the total emissions from the facilities included. Emissions trading covers about half of the EU’s sources of emissions in energy production and energy-intensive industries. Under a revised EU ETS Directive (EU Directive No 2009/29), one single EU ETS cap covers all EU Member States and the three participating non-EU Member States (Norway, Iceland and Liechtenstein),which means that there are no further differentiated caps by country. For allowances allocated to the EU ETS sectors, annual caps have been set for the period from 2013 to 2020. These caps decrease by 1.74 % annually, starting from the average level of allowances issued by Member States for the second trading period (2008–2012). The annual caps imply interim targets for emission reductions in sectors covered by the EU ETS for each year until 2020. In 2017, verified emissions from stationary installations covered under the EU ETS in Sweden totalled 19.7 Mt CO2-eq. with total GHG emissions of 52.7 Mt CO2-eq (without LULUCF), the share of ETS emissions is 37 %. The monitoring process for the ETS is harmonized for all EU Member States (Commission Regulation No 601/2012). The use of flexible mechanisms is possible under the EU ETS."