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Austrian National Emissions Trading System

Compare ETS
ETS Status
in force
Jurisdictions
Austria
Start of operation (year)
2022
Sectoral coverage
Transport
Buildings
Industry
Power
Allocation
Fixed price until 2025; auctioning foreseen from 2026 onwards
Offsets and credits
No offsets are allowed
Cap
There is no cap foreseen for the introduction and transition phase. For the market phase, the cap and annual reduction factor are still to be determined.
GHGs covered
Several gases
Average auction price (2022)
Fixed price: EUR 30 (USD 31.59)
Total revenue since beginning
EUR 250 million (USD 263 million) (estimated)
Download factsheet

General Information

Austria launched its national emissions certificate trading system (NEHG 2022) for fossil fuels not already covered by the EU ETS in October 2022 as part of the eco-social tax reform of autumn 2022.

Although the NEHG 2022 does not establish a carbon tax, the carbon pricing instrument follows in central parts the logic of existing energy taxes (fuel tax, coal tax, and natural gas tax) that are based on the Energy Taxation Directive (ETD). Thus, if a certain event is taxable under the existing energy taxes regime, an obligation to buy allowances arises under the NEHG. Taxable events are the production, import, or release of energy products from a tax warehouse in Austria or the supply of coal and natural gas to consumers. In practice, only a limited number of energy distributors and oil companies are responsible for the payment of energy taxes, while the majority of (end) consumers are not directly liable.

The NEHG 2022 aims to cover emissions outside the EU ETS, encompassing mainly emissions in the building and transport sectors. Between 2022 and 2025, the system will operate with an annually-increasing fixed price and a flexible cap, such that more allowances will be available for entities if needed.

The NEHG 2022 will be phased in gradually. The system has been designed in line with the reduction targets for non-EU ETS sectors as defined by the “European Effort Sharing Regulation” (ESR). The system might eventually transfer partially into the EU ETS II for which a political agreement was reached in December 2022 (see the “EU ETS II” factsheet for more).

In October 2022, the NEHG 2022 started operating. Its start was delayed by the energy crisis; it was pushed back three months from its original start date of July 2022 as part of the government’s energy price relief plan.

By October 2022, regulated entities had to open a registration account on the dedicated platform. Late registration was possible without penalty until February 2023. Companies must surrender national emission allowances based on their emissions every quarter of the year; the first surrender day was the end of March 2023.

Transport
Buildings
Industry
Power

Emissions & Targets

73.6 (2020)

By 2030: 36% below 2005 GHG levels (Climate Change Act; foreseen to be 48% below 2005 GHG levels as agreed at the EU level in November 2022)

By 2040: GHG neutrality (foreseen to be established in the current legislative program)

Fixed price: EUR 30 (USD 31.59)

2023: EUR 32.5 (USD 34.22); 2024: EUR 45 (USD 47.39); 2025: EUR 55 (USD 57.92)

Size & Phases

Several gases

PHASE ONE: Five years (2022-2026), including:

Introduction phase (2022-2023)

Transition phase (2024-2025)

Market phase (starting 2026)

There is no cap foreseen for the introduction and transition phase. For the market phase, the cap and annual reduction factor are still to be determined.

The NEHG 2022 covers all fossil fuel distributors (producers/importers) of fuels used in the transport, buildings, agriculture, and energy sectors, as well as from small industries. This essentially concerns the following fossil energy sources: petrol, gasoil (diesel), heating oil, natural gas, liquefied gas, coal, and kerosene. Fuels in admixture with biogenic fuels receive a lower emissions factor than purely fossil fuels.

Aviation and navigation in international inland waters as well as certain fuels like sustainable LNG are exempted from the surrender of allowances during the fixed-price phase.

Provisions are in place to avoid unnecessary double burdens for installations covered by the EU ETS. Emissions that arise from a fuel delivered to and used in an EU ETS installation must be reported by the EU ETS installation in any case and can then be exempted from the NEHG 2022. The exemption can be granted in advance, although a subsequent refund is also possible.

In addition, companies that are particularly affected by the NEHG 2022 (e.g., in the transport sector) can also apply for a partial refund of the carbon price to avoid so-called hardship cases.

Moreover, the NEHG 2022 foresees compensatory measures for firms facing additional costs in the agricultural and forestry sectors.

 

INCLUSION THRESHOLDS: Trading participants that place less than one tonne of CO2e emissions per year into circulation are exempt from the obligations. 

Upstream

N/A

Allowance Allocation & Revenue

Introduction and transition phase (2022-2025): The number of available allowances is not limited. Allowances are sold for an annually increasing fixed price:

  • 2022: EUR 30 (USD 31.59)
  • 2023: EUR 32.5 (USD 34.22)
  • 2024: EUR 45 (USD 47.39)
  • 2025: EUR 55 (USD 57.92)

Market phase (starting January 2026): Auctioning of allowances starts in 2026 with free price determination.

CARBON LEAKAGE SCHEME: The NEHG 2022 is accompanied by predefined exemptions and relief measures to specific sectors for certain specific additional burdens that might result from the NEHG 2022. Specifically, the relief is provided to significantly affected economic sectors that are at particular risk of relocating their production to countries with less stringent climate policies (carbon leakage).

In these cases, companies can benefit from a reimbursement of additional costs induced by the NEHG 2022. Energy-intensive industries pursuant to Article 10b of Directive 2003/87/EC are particularly at risk of carbon leakage and therefore eligible for the partial refund.

The system uses compensation based on fuel benchmarks and fixed compensation levels.

Estimated EUR 250 million (USD 263 million) since the beginning of the program in October 2022.

Revenues will be partly recycled to consumers via the “regional climate bonus”. This bonus is designed as a regionalized climate compensation for the carbon price (regionalized lump-sum cash transfer). Primary residents will receive financial support that increases with the carbon price (no hard link).

Flexibility & Linking

Banking is not allowed during the introduction and transition phase.

No offsets are allowed.

The system may eventually transfer partially into the EU ETS II (see the “EU ETS II” factsheet for more).

Compliance

One calendar year. Entities have until the end of July to surrender allowances to cover the reported emissions of the previous year.

REPORTING FREQUENCY:

Annual self-reporting in the form of an emissions report (“Treibhausgasemissionsbericht”) based on electronic templates is to be submitted by the end of June . During the introductory phase (2022-2023), a simplified emissions report, which is based on the already available data of the energy tax declarations, is to be submitted by the end of June.

The emissions report must be based on a previously approved monitoring plan. Every modification to the monitoring plan needs to be addressed to the competent authority by the end of each calendar year. During the introductory phase (2022-2023), a simplified registration and emissions reporting regulation applies. In this phase, no monitoring plan must be submitted.

VERIFICATION: The emissions report must be accompanied by a verification report by an independent verifier.

During the fixed-price phase, entities must pay an increased certificate price for each tonne CO2e for which no allowance has been surrendered, set at two times the fixed price, in addition to a financial penalty.

After the fixed-price phase, entities pay an increased certificate price of EUR 125 per tonne CO2e (USD 131.63).

For other instances of non-compliance, e.g., misreporting, or late reporting, entities can be fined.

Market Regulation

The NEHG 2022 does not contain details on the concrete design of the primary market for the market phase. These provisions are expected after the evaluation of the ETS at the end of 2024.

A price stability mechanism is introduced as an accompanying measure for the introduction and transition phases of the ETS. If the average energy price increases by more than 12.5% within one year, the ETS price increase for the next year decreases by 50% compared to the price increase planned by the NEHG. Likewise, if the average energy price decreases by more than 12.5%, the ETS allowance price will also increase by 50% in the following year.

Due to high energy prices in 2022, the price stability mechanism has become applicable for 2023. The price of an emission allowance is therefore EUR 32.50 in 2023 (USD 34.22).

Other Information

Austrian Federal Ministry for Finance (BMF): Authority responsible for establishing the regulatory framework of the ETS.

Office for National Emissions Allowance Trading at the Austria Customs Office: Implementing authority, e.g., responsible for receiving emissions reports.

A first evaluation of the national ETS is expected by mid-December 2024. Article 19 of the NEHG 2022 foresees an evaluation process which also covers the specification of the market phase in line with Austria’s climate targets, as well as an evaluation of the maintenance of exemptions for certain sectors. The evaluation also considers the introduction of a possible second EU ETS covering the buildings and road transport sectors.

National Emission Allowance Trading Act 2022 - NEHG 2022

Eco-social tax reform 2022

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