Union registry for emissions trading system allowances

KEY POINTS

EU registry

• The EU registry is a single, centralised online database run by the European Commission that holds accounts for operators such as power stations and airline and maritime operators.
• It covers all EU Member States taking part in the EU ETS set up by Directive 2003/87/EC (see summary), which aims to reduce emissions in a cost-effective manner as part of the EU’s efforts to combat climate change.
• The registry records:
• • compliance entities covered by Directive 2003/87/EC in each Member State and any free allowances allocated to those entities;
  • accounts of companies or individuals with such allowances;
  • transfers of allowances performed by account holders;
  • verified annual carbon dioxide (CO₂) emissions of compliance entities;
  • the annual reconciliation of allowances and verified emissions.

Phase IV

• This regulation sets out the general, operational and maintenance requirements for the EU registry for phase IV of the EU ETS from 2021 to 2030.
• It replaces Regulation (EU) No 389/2013 (see summary), which covered phase III (2013–2020) of the EU ETS.

Main elements

The regulation covers a number of aspects, including the following.

• The registries system is operated and maintained by a central administrator and national administrators.
• A centralised Union registry, which automatically checks, records and authorises all transactions between accounts in the registry. There are specific rules for the EU ETS registry regarding issues such as:
• • verified emissions and compliance;
  • transactions, including rules on the execution of transfers and the creation, allocation and transfer of allowances;
  • trusted account lists for transactions above a particular threshold (value) to be set by the central administrator, to ensure high-value transactions are secure;
  • improving links between the EU ETS and other ETS schemes where a linking agreement has been concluded (e.g. the Swiss ETS – see summary).
• Where discrepancies are detected, the central administrator must ensure that the registry terminates the relevant processes and inform the relevant account or allowance holders that the process has been terminated.
• Technical rules and requirements for the registry, including national help desks for account holders and representatives.

Amending Regulation (EU) 2025/1253 further refines these arrangements to reflect the expansion of the EU ETS to new sectors, in particular maritime transport, buildings and road transport. As a simplification measure for Member States, it introduces new ETS2 account types for competent authorities, for the purpose of reporting historical emissions for the years 2024 and 2025. Additionally, it establishes mechanisms to block accounts in cases of non-compliance, and procedures for the restitution of allowances following court rulings, ensuring the consistent and effective operation of the registry as the system broadens.

Fit for 55 package

As part of the fit for 55 package, Directive (EU) 2023/959 amended Directive 2003/87/EC, introducing new sectors (e.g. maritime transport) in the EU ETS as of 2024. It also created an adjacent ETS system for buildings, transport and additional sectors as of 2027. These changes are reflected in Regulation (EU) 2019/1122 by amending Regulation (EU) 2023/2904, which introduces rules and tools allowing shipping companies and regulated entities to enrol in the registry for their ETS compliance.

Amending Regulation (EU) 2023/2904 also does the following.

• Introduces mandatory flagging of bilateral transactions for the execution of transactions to provide better information on the monitoring and reporting of emission allowances, thus improving the transparency and integrity of the European carbon market. This permits market regulators to receive regular and timely information from the registry.
• Aligns the compliance dates for operators to surrender allowances in Regulation (EU) 2019/1122 with those set out in Directive 2003/87/EC. These compliance dates are 30 September for stationary installations and aircraft operators, and 30 September and 31 May respectively for maritime operators and regulated entities.
• Introduces a new registry account type for non-EU governments that have entered into a non-binding arrangement with the EU in accordance with Directive 2003/87/EC.

Repeal

Regulation (EU) 2019/1122 repeals and replaces Regulation (EU) No 389/2013. The latter applied until 31 December 2025 to all operations in relation to the 2013–2020 trading period and to the Kyoto accounts until the true-up (the additional period for the completion of commitments) of the second commitment period of the Kyoto Protocol in 2023.