Validity of emission allowances in new trading period

The emission allowances (EUA and AEUA) that will be allocated to you in phase 4 will not be valid for use in phase 3. However, any remaining emission allowances you may have from phase 3 will continue to be valid in phase 4 and thereafter. You do not need to take action yourself to keep these allowances in your account(s).

Year-end closing 2020

The transitional year from the 3rd to the 4th phase falls in 2021. In that year, you will receive emission allowances from phase 4, while closing the trading year for phase 3. You will close the trading year using emission allowances from phase 3. Phases 3 and 4 will overlap until the end of the year-end closing in May 2021.

Some companies use the emission allowances allocated in February to surrender them in April of the same year. This will not be possible during the transition from phase 3 to phase 4, as phase 4 allowances are not valid in phase 3. Accordingly, the CO2 registry does not permit surrendering phase 4 allowances before the final year-end closing of phase 3.

Participants who have to surrender allowances over 2020 need to make sure they have enough emission allowances from phase 3 in their account to surrender.

Validity emission allowances form phase 3 to phase 4

Identifying phase 4 allowances

It will be possible to identify phase 4 allowances by a marking indicating that they are from phase 4. This applies to all phase 4 allowances, so both the auctioned allowances and the allowances distributed through free allocation.

Buying allowances by auction or from third parties

The allowances that will be issued by auction from 1 January 2021 will be phase 4 allowances. These cannot be used for the 2020 year-end closing. If you buy allowances from third parties during the transition period, it is important to know whether these are phase 3 or phase 4 allowances.

Use of CERs in phase 4 EU ETS

No use of CERs in CO2 registry
In phase 4 of the EU ETS, it will no longer be permitted to use CERs* in the EU ETS. Up to 1 May 2021 at the latest, you can exchange CERs for phase 3 emission allowances (EUA/AEUA) in the CO2 registry.

Holding credits in the CO2 registry
From 1 May 2021, incoming transactions with CERs will no longer be allowed in EU accounts. Holding CERs will still be allowed for some time in the CO2 registry:

  • in EU accounts: until 1 July 2023, CERs already held in accounts can be held in EU accounts in the CO2 registry;
  • in Kyoto accounts: until 1 January 2026 CERs may be held
     
* This applies to all ‘Kyoto units’, meaning CERs and ERUs 

In which account can you hold which type of allowance in phase 4?

Operator holding account

Aircraft operator

holding account

Trading account

Kyoto account

EUA

Yes

Yes

Yes

No

AEUA

Yes

Yes

Yes

No

Valid CERs and ERUs

Only if obtained on the account before 1 May 2021: in such case, yes until 1 July 2023*

Only if obtained on the account before 1 May 2021: in such case, yes until 1 July 2023*

Only if obtained on the account before 1 May 2021: in such case, yes until 1 July 2023*

Yes, until 1 January 2026

Invalid CERs and ERUs**

No

No

No

Yes, until 1 January 2026

*From 1 May 2021, incoming transactions with CERs and ERUs will no longer be permitted in EU accounts.

**Since 2013, holding invalid CERs and ERUs (invalid in the EU ETS) has only been permitted in Kyoto accounts.