The European Union Emissions Trading Scheme (EU ETS) commenced in 2005. The EU ETS is a key mechanism to enable the EU to meet its targets under the Kyoto Protocol. The first phase of the EU ETS covers the period 2005-2007, while the second phase coincides with the Kyoto Protocol's first commitment period, from 2008 to 2012. The first phase of the EU ETS applies to more than 7,000 companies and 12,000 installations in the heavy industrial sectors of the EU. These include energy utilities, oil refineries, iron and steel producers, the pulp and paper industry, as well as producers of cement, glass, lime, brick and ceramics. Under the scheme, greenhouse gas emission allowances, called EU Allowances (EUAs), are allocated to specific industrial sectors through national allocation plans (NAPs). Individual companies receive a share of these EUAs based on historic emissions benchmarks. Individual companies may also purchase Certified Emissions Reductions (CERs) from the Clean Development Mechanism on the international market. The individual companies are then required to acquit sufficient EUAs and CERs to cover their emissions levels in each phase.