Overview

Description

Austria launched its national emissions certificate trading system (Nationales Emissionszertifikatehandelsgesetz – NEHG) for fossil fuels not already covered by the EU ETS in October 2022. Although the NEHG 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). 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 subject to the NEHG 2022. The NEHG aims to cover emissions outside the EU ETS, encompassing predominantly emissions in the buildings and transport sectors. Between 2022 and 2025, the system operated with an annually increasing fixed price and a flexible cap, such that more allowances will be available for entities if needed. The NEHG is being 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 may eventually transfer into the EU ETS 2.

Recent Developments

Due to the postponement of EU ETS until the end of 2027, announced in November 2025, Austria's ETS will continue through 2027 before being replaced by EU ETS 2 from January 2028 onwards.

Coverage

The Austria ETS applies to fossil fuels used in the transport, buildings, agriculture, and energy sectors, as well as from small industries. This essentially concerns the following fossil energy sources: petrol, gasoil (diesel), heating oil, natural gas, liquefied gas, coal, and kerosene. Fuels in admixture with biogenic fuels receive a lower emissions factor than purely fossil fuels. ENtities that would be liable for less than 1 tonne of CO2e per year are excluded. In practice it covers mostly buildings and road transport.

Pricing and Allocation Approaches

Set price

Compliance Approaches

Annual

Relation to Other Compliance CPIs

Facilities covered by the EU ETS are exempt from the Austria ETS.

Covered Sectors

Transport

Buildings

Agriculture, forestry and fishing fuel use

Electricity and heat

Mining and extractives