Compliance emissions markets

Compliance emissions markets are organised by states or regions and central mechanisms for implementing climate policy. Certain sectors or companies are legally obliged to participate. These companies must purchase emission rights for the emissions they cause and submit them to the responsible authorities.

The European Emissions Trading Scheme (EU ETS) is the most important climate protection instrument of the European Union and so far covers about 40 percent of all greenhouse gas emissions in the EU. Through the European Green Deal and according to the proposals in the EU Commission’s Fit for 55 package, the European emissions trading system is currently being reformed. Emissions from road transport and buildings are to be covered and priced under a new emissions trading system (EU ETS II).

In Germany, the national emissions trading system (nEHS) exists in parallel. According to the Fuel Emissions Trading Act (BEHG), distributors of fuels are obliged to acquire and submit national emission certificates.

With this national instrument, Germany bridges the gap in the EU ETS at least until emissions in the road transport and buildings sectors are priced by the EU ETS II.

Furthermore, the Carbon Border Adjustment Mechanism (CBAM) is intended to ensure that emissions contained in imported goods are priced equally through climate levies on imports. This system is intended to compensate for possible competitive disadvantages of companies within the EU ETS compared to non-European competitors and to prevent carbon leakage through a relocation of emission-intensive industries.

Participating companies are confronted with a complex set of rules and extensive compliance and reporting requirements that impact internal company processes. With our expertise, you can fulfil your obligations efficiently and be optimally prepared for the upcoming changes.

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services

The national emission trading system in Germany (nEHS)

We support you in your obligations around the national emissions trading scheme (nEHS) in Germany according to the Fuel Emissions Trading Act (BEHG).

The European Emission Trading Systems (EU ETS I and II)

We prepare your company for the existing European emission trading system and the new European emission trading system for road transport and buildings, which will be phased in from 2027.

The Carbon Border Adjustment Mechanism (CBAM)

We support you in preparing for the EU’s CO2 border adjustment mechanism, which imposes a CO2 price on certain goods imported from outside the EU. The CBAM will be introduced gradually from 2023 onwards.

Intermediary in the European and national emissions trading system (EU ETS I and nEHS)

Use our service package to ensure that your participation in compliance emissions markets runs smoothly and efficiently.

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FAQs

What is the difference between compliance and voluntary emissions markets?

Compliance emissions markets are organised by states or regions. Certain companies are legally obliged to participate in these markets (for example EU ETS or nEHS).

In voluntary emissions markets, companies can purchase CO2 certificates and use them to achieve their climate targets.

What energy and climate targets has the EU set for itself?

In the EU Green Deal and the Fit for 55 package, the EU has set itself ambitious energy and climate policy goals. The share of renewable energies in final energy consumption is to increase to 40 percent by 2030 and even to 45 percent according to the new REPowerEU strategy to reduce import dependence on Russian fossil fuels. Greenhouse gas emissions are to fall by at least 55 percent by 2030 compared to 1990. By 2050, the EU is to be climate neutral.

What is the EU ETS?

The European Emissions Trading Scheme (EU ETS or EU ETS I) has been the EU’s central climate protection instrument since 2005- and covers about 40 % of the EU-wide greenhouse gas emissions. It aims to reduce greenhouse gas emissions in the participating energy sector, energy-intensive industry, aviation and shipping. The EU ETS works according to the principle of “cap & trade”. A cap determines the total amount of greenhouse gas emissions that may be emitted by installations subject to emissions trading. The emission allowances can be freely traded on the market. This creates a price for the emission of greenhouse gases. This price creates incentives for the participating companies to reduce their greenhouse gas emissions.

How high should the emission reductions in the EU ETS be?

The emission reductions of the sectors and industries in the EU ETS are to fall by at least 62 percent by 2030 compared to 2005. By 2020 the emissions in the EU ETS have already been reduced by 21 percent compared to 2005.

What is the nEHS?

The national emissions trading system (nEHS) is regulated by the Federal Emissions Trading Act (BEHG) and, since January 2021, obliges distributors of fuels in Germany to purchase pollution rights in the form of certificates (so-called “upstream” emissions trading). In contrast to the EU ETS, fuels in the transport and heating sectors are affected by the nETS. Mechanisms exist to avoid double burdens for companies active in both, the EU ETS and the nETS.

What is the EU ETS II?

The details of a new and second emissions trading system (EU ETS II) are currently being negotiated at the EU level. The EU ETS II will require fuel distributors in the road transport and building sectors across the EU to participate and will put a price on emissions in these sectors from 2027 onwards.

What is the Carbon Boundary Adjustment Mechanism (CBAM)?

The Carbon Border Adjustment Mechanism (CBAM) is a climate protection instrument currently being negotiated at EU level. CBAM obliges importers of certain goods to submit emission reports for their products and to submit CBAM certificates depending on the CO2 content of the imported goods. CBAM is to be implemented from 2023 onwards and the European Union will price CBAM allowances in line with the price level in the European Emissions Trading Scheme (EU ETS) from 2026.