Obligations under ETS

Companies subject to mandatory participation in the European Emissions Trading System (EU ETS) must fulfil certain obligations.

Permits and monitoring

Under the ETS, companies must apply for a greenhouse gas emissions permit. To do so, they must draw up a monitoring plan demonstrating emissions measurement methods that are accurate and in accordance with the regulations. Companies must monitor their emissions throughout the year in accordance with this plan, and notify the NEa of any modifications to the plan, or deviations from it.

Accounts and allowances

After receiving their permit, companies must open an account in the registry, into which the NEa will (in most cases) issue a quantity of free allowances based on previous production figures. To qualify for free allowances, companies must submit a verified application to the NEa. Once the quantity of free allowances has been calculated, it can still be adjusted if anything changes within the company or in legislation. Companies have an obligation to notify the NEa of any such modifications.

Reporting and surrender of allowances

Every spring, all companies must report on their emissions over the past year to the NEa via a verified emissions report. They must also surrender enough allowances to compensate for their emissions. These may be free allowances, or allowances purchased on the market or via auction. The responsibilities to report and surrender allowances jointly constitute the year-end closing procedure. The verifier's findings may also lead to the company having to submit an improvement report.

Supervision and enforcement

The NEa monitors companies' compliance. Companies can therefore expect visits by inspectors, and the NEa can take enforcement action if there is cause to do so.

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