European emissions trading systems multiplicate, so keep an eye on trading documentation. 


Directive (EU) 2023/959 of the European Parliament and of the Council has introduced new sectors (maritime transport) in the EU ETS as of 2024, but, what’s even more important, has created an adjacent ETS (so-called ETS 2) system for buildings, transport and additional sectors as of 2027. The rules for the latter are laid down in the Chapter IVa of the EU ETS Directive.

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New type of ETS requires a new type of emission allowances, hence, they will be created for ETS 2 and accommodated into the EU ETS registry system. Commission Delegated Regulation of 25 October 2023 does the necessary job. 

Considering allowances are not fungible between ETS 1 and 2, the new terminology had to be created: allowances from ETS 1 are now ‘general allowances’ and allowances from ETS 2 became ‘regulated entity allowances’. The latter must not be held on operator holding accounts, aircraft operator holding accounts, maritime operator holding accounts or third country government accounts.

Another regulatory switch relates to aviation allowances. It is to be recalled that starting from phase 4 of the EU ETS (as from 1 January 2021) aviation allowances can be surrendered in order to meet the compliance obligations of both aviation operators and stationary installations. Consequently, operator holding accounts with the EU ETS Registry may hold aviation allowances (this does not depend on the issuance year of the allowances).

Now, the novelty is that as of 1 January 2025 general allowances are to be issued also for the aviation sector, by means of free allocation and auctioning, thus covering emissions from the stationary, maritime and aviation sectors. However, in order to ensure a smooth transition and legal certainty for the users, aviation allowances issued before the end of 2024 will remain in the accounts and in circulation.

Let’s recall that compliance dates for operators to surrender allowances have been differentiated as well, they are as follows:

  • 30 September for operators covered by ETS 1 (installation, aircraft operator, shipping company),
  • 31 May for regulated entities operating in the ETS 2 (the sectors of buildings and road transport as from 1 January 2028). 

Hence, in 2024 the EU ETS compliance deadline for operators to surrender allowances has been postponed from 30 April 2024 to 30 September 2024. 

Considering these small but important nuances EUA trading documentation (OTC including) will need some refreshment, in particular to hedge the proper type of emission allowances in the appropriate timelines. Organised markets adapted the relevant EUA Contract Product Specifications accordingly (additional EUA Futures and Options expiries for August), see for example:




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