On January 1st, 2025, a new emissions trading system entered into force for regulated entities, called EU ETS2.
Who is covered by ETS2
ETS2 will include CO2 emissions from regulated entities such as fuel combustion in the construction industry, road transport and additional sectors which are mainly small industries and thereby not covered by the existing EU ETS1. Those who will be covered by ETS2 can both be companies and individuals who are registered as fuel suppliers and pay excise duties who will be obligated to buy and surrender allowances to cover their CO2 emissions. End users such as households or car users will not be covered by ETS2.
The Danish Energy Agency is the Competent Authority (administering Authority). For questions regarding the monitoring plan, EU Reporting Tool, discharge permit etc., please contact The Energy Agency via [email protected].
The European Green Deal
ETS2 is part of The European Green Deal, which aims to help EU Member States to achieve their emission reduction targets.
ETS2 will be a ‘Cap and Trade’ system like the existing EU Emissions Trading System /ETS1). However, ETS2 will be independent from the existing ETS1, which already includes stationary installations, aviation and maritime. ETS2 is a part of the EU ETS Directive, Directive 2003/87/EC.
ETS2 Account Opening
Companies covered by ETS2 must open a Regulated Entity Holding Account in the EU ETS Registry. Form January 1st, 2027, it will be possible to open Regulated Entity Holding Accounts. From mid-2026, the Danish Business Authority will contact all companies covered by ETS2 directly, in order to start the process for opening ETS2 accounts in the EU ETS Registry.
ETS2 Allowances
ETS2 allowances will become operational in 2027. ETS2 allowances will be unique and independent from the already existing ETS1 allowances. This means that ETS2 Account Holders cannot trade ETS1 allowances, but only with other ETS2 Account Holders. Only Account Holders with Trading Accounts can trade allowances with both ETS2 and ETS1 Account Holders.
ETS2 Compliance
Companies covered by ETS2 must surrender allowances in May 2028 corresponding to their 2027 led emissions. The deadline for surrendering allowances will be on May 31st, 2028, and each subsequent year.