Postponement of the start of the regulatory phase of EU ETS 2
Note: The European Union has agreed to postpone the start of the regulatory phase (i.e. the start of the surrender obligation for emission allowances) of EU ETS 2. The regulatory phase of the EU ETS 2 will therefore start one year later than originally planned, i.e. on 01/01/2028. In practical terms, this postponement means that the current reporting phase in EU ETS 2 will be extended until the end of 2027. Correspondingly, in the period from 2024 to 2027, reporting and surrender obligations within the nEHS will continue to apply under the Fuel Emissions Trading Act (BEHG) in parallel with the reporting obligations in EU ETS 2.
The postponement has been formally implemented by an EU regulation, which primarily sets out amendments to the European Climate Law. The postponement applies immediately in Germany.
EU Regulation amending the European Climate Law
What is EU ETS 2?
The ‘Fit for 55 package’ will introduce a new independent emissions trading system for buildings, road transport and other industries in the EU (EU ETS 2, as opposed to the existing European Emissions Trading Scheme 1, EU ETS 1). After a four-year reporting phase, EU ETS 2 is due to start in full (that means with a surrender obligation for emission allowances) for participating companies in 2028. Similar to the national emissions trading system (nEHS), EU ETS 2 is an ‘upstream system’ which means that it is not the users of fossil fuels (for example for cars or heating systems) who are obliged to participate, but those companies that place fuels on the market within the scope of EU ETS 2 (for example gas traders).
An overview of EU ETS 2 can be found in the following publication:
What is the legal framework for EU ETS 2?
Directive (EU) 2023/959 amending Directive 2003/87/EC of 10/05/2023 supplemented the existing emissions trading system at EU level with regulations for the EU ETS 2. At national level, the European legal requirements set out in this Directive have been implemented in national law by the amendment of the Greenhouse Gas Emissions Trading Act (TEHG) of 27/05/2025 (Federal Law Gazette 2025 I No. 70).
Greenhouse Gas Emissions Trading Act
(available in German only)
Treibhaus-Emissionshandelsgesetz (TEHG)
The European Commission has also issued EU implemeting regulations on the specific organisation of EU ETS 2. These apply directly to all EU ETS 2 stakeholders in all Member States and therefore do not need to be transposed into national law. The following EU regulations are particularly relevant for the reporting phase:
- The EU Monitoring & Reporting Regulation (2018/2066) regulates the requirements for monitoring and reporting emissions in the EU ETS as a whole, that means also for EU ETS 2.
- The EU Accreditation and Verification Regulation (2018/2067) regulates the accreditation of verifiers in the EU ETS as a whole and, in particular, defines the requirements for the verification of emissions reports by verifiers.
Who is required to participate in EU ETS 2?
For example, wholesalers of fuels or manufacturers of fuels with a wholesale distribution network who place fuels on the market are required to participate. This also includes companies that import fuels into Germany, i.e. that import them for the purposes of energy tax. In principle, all natural or legal persons or partnerships within the EU ETS 2 are liable if they are defined as energy tax debtors in the circumstances set out in Section 3(19) of the Energy Tax Act (TEHG). In cases where storage takes place by third parties in a warehouse as per Section 7(4)(1) Energy Tax Act (EnergieStG) for fuels, the depositor takes the place of the tax warehouse holder as the ‘responsible party’.
For the use of coal as a fuel for power generation or heating, exempt from energy tax under section 37(2), first sentence, point 3 or point 4 of the Energy Tax Act (EnergieStG), the holders of a licence under section 37(1), first sentence, of the Energy Tax Act (EnergieStG) are considered to be the obligated parties – as is the case under the BEHG.
This means that the majority of BEHG (Fuel Emission Allowance Trading Act) regulated entities are also among the obligated companies in EU ETS 2.
Waste, however, is not covered by EU ETS 2. From 2024, owners of municipal waste incineration plants will, instead, be required to report their plants’ emissions under EU ETS 1.
Which fuels are covered by EU ETS 2?
As in the nEHS, fuels placed on the market that are subject to energy tax are also covered by the reporting and surrender obligation in EU ETS 2. However, compared to the current scope of the nEHS, more fuels subject to energy tax are included, for example ‘other energy products’ such as petroleum coke, which are subject to energy tax according to Section 23 Energy Tax Act (EnergieStG).
The use of energy tax-exempt coal (Section 37(2)(1)(3) and (4) EnergieStG) as a fuel or heating material for generating electricity or as a heating material for processes (Section 51 EnergieStG) occurring outside installations covered by EU ETS 1 is subject to EU ETS 2.
Within the framework of an ordinance authorisation, the Greenhouse Gas Emissions Trading Act (TEHG) provides the option to regulate restrictions on the application of specific EU ETS 2 emission events as set out in the TEHG. Simplifications for the reporting phase are planned at the regulatory level, but these have not yet entered into force: This in particular applies to the market placement of fuels provided for in the draft bill due to the emergence of the energy tax in accordance with Section 14(2), Section 23(1) or (1a) of the EnergieStG and the use of energy tax-free coal as a fuel or heating material.
Detailed information on the scope of application can be found in our guidelines for the EU ETS 2 in the 2024 to 2026 reporting phase.
Legal basis
(available in German only)
Detailed information on the scope of application can be found in our guideline to the EU ETS 2 for the 2024 to 2027 reporting period.
Guideline
(available in German only)
A fundamental difference to the nEHS is that the scope of EU ETS 2 is limited to certain uses of fuels, that means fuel consumption in the buildings and road transport industries as well as other specific industries. Other industries include the energy industry, the manufacturing industry and the construction industry, which are not covered by EU ETS 1.
In principle, therefore, EU ETS 2 covers those fuels that are energy products according to Section 1(2) and (3) Energy Tax Act (EnergieStG), have been placed on the market and are assigned to the aforementioned industries.
Energy Tax Act
(available in German only)
EU ETS 2 does not cover fuels that are placed on the market but are used in EU ETS 1 activities (stationary installations, air transport, maritime transport). Monitoring and reporting of such fuel quantities is nevertheless necessary – as has been the case under the nEHS – in order to ensure that the actual deductibility can be verified within the framework of the advance deduction procedure.Hazardous waste or municipal waste used as fuel is also excluded, although installations for the combustion of municipal waste will be subject to a reporting obligation in EU ETS 1 from 2024.
The EU ETS 2 also does not cover, for example, fuel emissions that are attributable to private, non-commercial aviation or shipping, agriculture and forestry, agricultural road transport, rail transport, fish farming and individual other sectors (e.g. military). The TEHG provides for an ‘opt-in’ for the expansion of EU ETS 2 in order to include the above-mentioned, non-covered industries in the future. Such an opt-in requires the European Commission’s approval and will only take effect at the beginning of the year following the granting of such an approval decision.
What obligations have regulated entities as per EU ETS 2 had from 2024 onwards?
In principle, all regulated entities as per EU ETS 2 require an emissions permit to release greenhouse gas emissions through an activity within fuel emissions trading in accordance with Annex Part B Section 2 TEHG. Also, as in the nEHS, a monitoring plan must be submitted for approval. This forms the basis for monitoring and determining emissions in the EU ETS 2.
Regulated entities as per EU ETS 2 who are subject to reporting requirements for the first time must apply for an emissions permit from the DEHSt without delay, but no later than the end of the day on which they commence their EU ETS 2 activities. In addition, they must submit a monitoring plan to the DEHSt without delay, and no later than the end of the first calendar month following the day on which they commence their EU ETS 2 activity.
Regulated entities as per EU ETS 2 are also required to report emissions in the previous year (reporting year) and to submit an emissions report (EmB) by 30 April each year in accordance with TEHG.
To ensure that those responsible and verifiers have sufficient time to prepare and verify the EU ETS 2 emissions reports, we have agreed with the Federal Ministry for the Environment, Climate Protection and Nuclear Safety (BMUKN), which is responsible for technical supervision, that the EU ETS 2 EmB for 2025 must be submitted absolutely no later than 31/05/2026.
With regard to the EmB in the EU ETS 2 from 2025 onwards the following should also be noted:
- A separate EmB must be created in the Form Management System (FMS).
- The EmB must be verified, although in many cases a site visit can be waived when verifying EU ETS 2 emissions reports. Chapter 9.2 of the Guideline provides further information.
- Exception: The verification requirement does not apply to emissions reports submitted by regulated entities as per EU ETS 2 who exclusively use coal as fuel or heating fuel in accordance with Section 37(2)(1)(3) of the Energy Tax Act (EnergieStG).
In parallel with the reporting obligation in EU ETS 2, the reporting and surrender obligations in the nEHS will continue to apply in the period from 2024 to 2027.
Further information
nEHS for heating and transport
Emission permit, monitoring plan and emission report
All regulated entities as per EU ETS 2 apply for an emissions permit. We, the German Emissions Trading Authority, are the competent authority for issuing emissions permits.
As a basis for the emissions report, regulated entities as per EU ETS 2 must draw up a monitoring plan that provides complete and transparent documentation of the monitoring methods used for the fuels placed on the market in a calendar year. This plan should be submitted to us (DEHSt) for approval.
As nEHS and EU ETS 2 will simultaneously apply during the 2024 – 2027 reporting period, synergies between nEHS and EU ETS 2 should be exploited in monitoring and emissions reporting. Accordingly, data collection for regulated entities as per EU ETS 2 will be based on the existing data structure of the nEHS. This approach aims to avoid the possible double entry of data which meets the requirements of both EU ETS 2 and the nEHS.
Our guideline provide an overview of the scope of the EU ETS 2 and the related obligations during the 2024 – 2027 reporting period. They describe the practical implementation of the monitoring and reporting requirements in accordance with the provisions of the EU Monitoring & Reporting Regulation (MRR) and highlight the synergies with the nEHS. The guidelines also describe how to create the application for an emission permit and the monitoring plan in the ‘3-in-1 Monitoring Plan’ FMS application, and where data still needs to be added. The guideline also includes instructions on how to create an EU ETS 2 emissions reports.
In addition, we provide video tutorials for the FMS application ‘3-in-1 Monitoring Plan’ and for the FMS application ‘‘Emissionsbericht 2024 - nEHS und EU-ETS 2’. These demonstrate the basic functions of the FMS applications.
Further information
(available in German only)
FMS-Anwendung "3-in-1-Überwachungsplan"
Direkt zur FMS-Anwendung: "Emissionsbericht - nEHS und EU-ETS 2"
EU-ETS 2 Probenahme (Beispielvorlage)
Antrag auf Emissionsgenehmigung nach § 4 TEHG für Brennstoffe nach § 23 EnergieStG
Video click instructions
The following videos provide practical guidance on using the FMS application to fulfil your obligations under the National Emissions Trading Scheme (nEHS) and the European Emissions Trading System 2 (EU-ETS 2). Step-by-step video guides with general instructions in German on using the FMS can be found on the following page:
(available in German only)
Cessation of activity
Regulated entities as per EU ETS 2 who cease fuel emissions trading activities within the terms of Section 3(19) of the German Emissions Trading Act (TEHG) can report this cessation and apply for the revocation of their emissions permit. To do so, the form ‘Anzeige der Einstellung der Tätigkeit „Brennstoffemissionshandel’ should be submitted, accompanied by a qualified electronic signature via the DEHSt mailbox as a new issue with the subject ‘EU-ETS 2 | Aufhebung Emissionsgenehmigung’ on the DEHSt platform.
A separate notification about the suspension of the placement of fuels on the market as per the nEHS is not necessary for the responsible parties as per EU ETS 2 pursuant to Section 3(29) TEHG. We will process the revocation of the emissions permit pursuant to Section 4 TEHG and the notification of the suspension in the nEHS together.
Further information
(partly available in German only)
Formular zur Anzeige der Einstellung der Tätigkeit „Brennstoffemissionshandel“
Improvement Report
During the reporting phase from 2024 to 2027, an improvement report is only required if the verification report from the verification body contains references to outstanding non-conformities (deviations from the approved monitoring plan) or recommendations for improvements. The improvement report must be submitted via the DEHSt platform by 31 July of the year in which the verification body drew up the verification report. It does not need to be verified.
If the improvements in the cases mentioned have already been realised and the amended monitoring plan has been submitted to us, there is no need to submit an additional improvement report.
Further information
(available in German only)
Formular: Verbesserungsbericht EU-ETS 2
Formular: Anhang zum Verbesserungsbericht EU-ETS 2
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