What type of fuels are covered under ETS2?
Who are the Regulated Entities?
ETS 2 is a new EU carbon trading scheme, which will address the carbon dioxide (CO2) emissions from fuel combustion in the road transport sector, buildings, energy, manufacturing and construction industries.
Companies regulated by the EU ETS must acquire carbon allowances. They can buy these on the carbon market or through the EU ETS auctions.
These carbon allowances only exist electronically. The companies regulated by the EU ETS must open Union Registry accounts to hold these carbon allowances. The Union Registry is like an online banking system which holds carbon allowances instead of money.
For ETS 2, there will be no free allocation. Auctioning revenues are to be used to finance the Social Climate Fund (SCF) or by the Member State for climate and social purposes.
The Environmental Protection Agency (EPA) is the National Competent Authority for ETS2, responsible for implementing and administering the national and EU regulations on the permitting of regulated entities and their Monitoring, Reporting and Verification obligations.
The EU ETS Directive has identified the fuels covered under ETS2 as follows:
That means the following types of fuels are currently excluded from the ETS2:
ETS 2 will be different to ETS1. It is an “upstream” system, which means the focus will be on the fuel-supplier (i.e. the regulated entity) rather than the final fuel consumer (car owner/householder etc).
Article 3(ae) of the ETS Directive defines the ETS2 regulated entities and can be summarised as follows:
In simple terms, the regulated entities are generally the fuel suppliers who pay the excise duties (including the carbon tax).
The Environmental Protection Agency (as National Competent Authority) will provide further advice and guidance to those regulated entities in the coming weeks and months.
The timeline is laid out as follows:
When? | Who? | What? |
---|---|---|
By 31st August 2024 | Regulated Entity | Submit to competent authority a Monitoring Plan for approval and open a registry account |
Before 1st January 2025 | National Competent Authority | Approve Monitoring Plan and issue Greenhouse Gas permit |
30 April 2025 | Regulated Entity | Submit report on historic emissions (2024) - non-verified |
1st January 2025 (and annually thereafter) | Regulated Entity | Start of monitoring period |
31st December 2025 (and annually thereafter) | Regulated Entity | End of monitoring period |
Each regulated entity must report their historical emissions for the year 2024 by 30th April 2025. They may require a Registered Entity Holding Account (REHA) in order to enter data on the Union Registry (UR). Following the initial report of their historical emissions, all regulated entities will be required to submit verified emissions report by 30th April each year thereafter.
Keep an eye out for emails or notices relating to webinars or workshops which will be taking place over the coming weeks. If you have not received any notification but think you may be a regulated entity, please contact us at ets2@epa.ie and we will register you to attend the information sessions.
If you have any queries, you can contact us at ets2@epa.ie