ETS-2 obligations on energy products for excise duties payers

28/08/24

The provisions of the Emission Trading System (ETS) for buildings, road transportation and additional sectors (hereafter ETS-2) will be effective per 1 January 2025. These ETS-2 provisions relate to the use of energy products and will basically apply when these energy products are released into free circulation.

What does this mean for your company?

The release into free circulation may occur upon importation from outside the EU or when ending an excise duties suspension arrangement, e.g. when releasing mineral oils from an excise warehouse or receiving the products as an registered consignee. Such a release into free circulation will trigger obligations for ETS-2, i.e. an ETS-2 authorization and a monitoring plan are required and the release must be reported to the ETS-2 authority.

The holders of excise warehouse authorizations or registered consignee authorizations for mineral oils products and other energy taxpayers should verify whether they may have these ETS-2 obligations and if so, start making the preparations for the application of the ETS-2 authorization and look into the requirements of the ETS-2 reporting.

Per 1 Januari 2025, the energy products may not be released into free circulation (i.e. measures, such as blocking shipments, may be applied) when the excise warehouse keeper or other entities that are appointed as the taxpayer for the excise duties / energy tax do not hold an ETS-2 authorization.

Additional information on ETS-2

The EU ETS-2 legislation links to the EU Energy Tax and Excise Duties Directives, as such the person responsible for the payment of the energy tax / excise duties is appointed as the person that needs to have the ETS-2 authorization as well as submitting the reports.

The applications for the authorization country in which the products will be released into free circulation. Likewise, the reports should also be submitted to these local authorities.

How can PwC help

PWC can provide assistance and guidance to your company with accessing the need for an authorization and/or the method for complying with the reporting obligations as well as with issuing the request for the authorization and monitoring plan.