News Category

Austria prepares for end of national ETS and launch of EU ETS 2

Lightbox Image (duplicate of Image)

On 15 May 2024, the Austrian Parliament approved measures to manage the transition from its national Emissions Trading System (NEHG) to the European Union's upcoming EU ETS 2. 

In 2023, the EU adopted a new emissions trading system, the EU ETS 2, which will be operational from 2027 (or 2028 in the event of exceptionally high energy prices). The system will cover fuels used for combustion in buildings, road transport, and small industries not included in the existing EU ETS, which largely overlaps with the coverage of Austria’s NEHG. As a Member State of the European Union, Austria transposed the EU ETS 2 requirement in its national law (“Emissionszertifikategesetz”) at the end of last year. 

To avoid two overlapping systems covering the same sectors, the Austrian Parliament stipulated that the Austrian national ETS will cease its operation by 31 December 2026, preceding the entry into force of EU ETS 2 from 1 January 2027. If the launch of the EU ETS 2 is to be delayed to 2028, the Austrian NEHG would continue to operate for another year. NEHG covered entities will have a NEHG compliance obligation until the end of 2026, and an EU ETS 2 obligation from 2027. The NEHG allowances are sold for a fixed price and are not tradeable. The Austrian Parliament further adopted measures to ease the transition between the two schemes for covered entities. Starting in 2025, the first reporting and registration obligations under EU ETS 2 will apply. During the transition period from 2025 to 2027, covered entities will report separately under both systems, but deadlines and calculation methods for NEHG and EU ETS 2 have been harmonized to facilitate reporting obligations. 

Germany, which operates a system similar to Austria's, is also expected to cease its National Emissions Trading System (BEHG) and transition to the EU ETS 2. A formal transition law has not yet been adopted.

ETS Jurisdiction