This article was last updated on 7 October 2022 to take into consideration the launch of the Austrian national ETS after its initial postponement.
On 1 October 2022, Austria launched its national ETS (nationaler Zertifikatehandel). The system covers CO2 emissions from fossil fuels used in the transport, building, waste, and agriculture sectors, as well as from small industries. The launch was initially set for 1 July 2022, but was temporarily suspended as part of an energy price relief package of the Austrian government. It is now being implemented as planned, marking the beginning of the compliance cycle after three months delay.
Introduced as part of the Ecological Tax Reform Act, Austria’s new carbon pricing mechanism takes the form of an ETS with a steadily increasing fixed price and without trading until 2025, before transitioning to a market phase thereafter. GHG emissions from Austria’s energy, industry, and domestic aviation sectors are already covered by the EU ETS. The new national ETS applies carbon pricing to sectors not covered by the EU ETS. Therefore, all major sectors in Austria face a price for CO2 emissions by now.
The carbon price will be charged upstream to fuel importers, and apply to petrol, diesel, heating oil, LPG, natural gas, coal, and kerosene. In the first phase, from 2022 to 2025, the government will start with a fixed price on emissions, issuing allowances for EUR 30/tCO2 (USD 30) in 2022. This price will increase to EUR 35/tCO2 (USD 34) in 2023, and to EUR 45/tCO2 (USD 44) in 2024, before reaching EUR 55/tCO2 (USD 54) in 2025. The government has not set a maximum number of allowances for issue (or “cap”), and trading is not yet allowed. Regulated entities must purchase allowances for the year 2022 between 1 November 2022 and 31 July 2023. Allowances covering emissions in 2023 can be obtained between 1 May 2023 and 31 July 2024. The system is managed by the Office for National Emissions Trading, an independent unit within the Austrian Customs Office.
From 2026 onwards, the system will transition to a market phase. The exact design of the market system will be developed based on a cross-ministerial evaluation that will take place in December 2024. According to the Ministry of Finance, more detailed regulations cannot yet be included in the Act, as developments in the context of the ‘Fit for 55’ package at EU level may lead to the establishment of an European-wide ETS for buildings and road transport, which would impact the design of the Austrian ETS.
Austria’s national ETS has similarities with the German national ETS that started operating in 2021. The German ETS is also currently operating with an increasing price for fuels used in the building and transport sectors until 2025, with the introduction of auctions and trading planned thereafter.
