One of the market-based mechanisms established by the Kyoto Protocol is "tradable allowances" or "emission trading rights" (ETRs). Directive 2003/87/EC implemented the principles of the Kyoto Protocol regarding market-based mechanisms, but did not indicate the tax regime applicable to them. Thus, this is to be determined by each Member State. This article considers the tax consequences of the tradable allowance mechanism in Belgium and explains how the ETRs mechanism works and the tax regime for the operators concerned.