Austrian National Emissions Trading System

Austria launched its national emissions certificate trading system (NEHG 2022) for fossil fuels not already covered by the EU ETS in October 2022 as part of the eco-social tax reform of autumn 2022.

Although the NEHG 2022 does not establish a carbon tax, the carbon pricing instrument follows in central parts the logic of existing energy taxes (fuel tax, coal tax, and natural gas tax) that are based on the Energy Taxation Directive (ETD). Thus, if a certain event is taxable under the existing energy taxes regime, an obligation to buy allowances arises under the NEHG. Taxable events are the production, import, or release of energy products from a tax warehouse in Austria or the supply of coal and natural gas to consumers. In practice, only a limited number of energy distributors and oil companies are responsible for the payment of energy taxes, while the majority of (end) consumers are not directly liable.

The NEHG 2022 aims to cover emissions outside the EU ETS, encompassing mainly emissions in the building and transport sectors. Between 2022 and 2025, the system will operate with an annually-increasing fixed price and a flexible cap, such that more allowances will be available for entities if needed.

The NEHG 2022 will be phased in gradually. The system has been designed in line with the reduction targets for non-EU ETS sectors as defined by the “European Effort Sharing Regulation” (ESR). The system might eventually transfer partially into the EU ETS II for which a political agreement was reached in December 2022 (see the “EU ETS II” factsheet for more).

The scheme covers the following sectors: Transport, Buildings, Industry and Power.

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