EU ETS - ETS2

EU EMISSIONS TRADING SYSTEM

What is the ETS2?

ETS2 is the regulatory extension of the EU Emissions Trading Scheme and represents one of the most significant changes resulting from the update of Directive 2003/87/EC in May 2023.The new system, distinct and separate from the traditional ETS system (referred to as “ETS1”), aims to control and reduce GHG emissions in the road transport, buildings, and small industry sectors not previously covered by ETS1.

The "obliged entities" in the new system are companies that supply fuels and combustibles (solid, liquid, and gaseous) intended for the activities listed in Annex III of Directive 2003/87/EC. The first year of application for the new ETS2 is 2025. All entities obliged by the regulation must:

  • By January 1st 2025, obtain authorization to emit greenhouse gases
  • By April 30th 2025, report the 2024 emissions to the Competent National Authority, which constitutes the historical baseline
  • Monitor their CO2 emissions on an annual basis starting from January 1st 2025
  • Report their emissions to the Competent National Authority by April 30th of each year, starting from 2026, following verification by an accredited body under Regulation 2067/2018/EU.

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What is the verification process according to the ETS2?

Emissions monitored on an annual basis, starting from 2025, must be verified by an accredited body in accordance with Regulation 2067/2018/EU before being transmitted to the Competent National Authority. Specifically:

  • No Renewals or Surveillance
    There are no provisions for renewals or surveillance; each year, a retrospective verification of the previous year's emissions is conducted.
  • Data Submission Deadline
    The deadline for reporting data to the Competent Authority is set for April 30 of each year; verification activities are carried out in the first four months of the year
  • Issuance of a Verification Statement
    The activity involves the issuance of a verification statement, following the format that will be provided by the Competent Authority.
     

FAQ - Frequently asked questions about the ETS2

  • Which Sectors are Affected by ETS2?

    The ETS2 system impacts the fuels and combustibles supplied for consumption and intended for use in the road transport sector, buildings (residential, commercial, and institutional), as well as other production sectors. Therefore, the entities obliged by the regulation are the companies that supply the aforementioned fuels and combustibles for consumption.

  • Is Emission Verification Mandatory Under ETS2?

    Yes, companies engaged in activities listed in Annex III of the EU ETS Directive are required to report their emissions, which must be verified by an accredited body in accordance with Regulation 2067/2018/EU.

EU EMISSIONS TRADING SCHEME

EU EMISSIONS TRADING SCHEME VERIFICATION PROCESS