EU ETS compliance deadlines: monitor, verify and surrender allowances each year

Every year, an operator in the EU Emissions Trading System (EU ETS) monitors its emissions under an approved monitoring plan, has its emissions report verified and submitted by 31 March, and surrenders allowances for the previous year's emissions by 30 September 189. One allowance covers one tonne of carbon dioxide equivalent (CO₂e): one tonne of CO₂, or the amount of another greenhouse gas that warms the climate as much 7. For every tonne not covered on 30 September, the operator pays an excess emissions penalty of €100 before indexation, and it still owes the missing allowances 10. The dates are in the ETS Directive (Directive 2003/87/EC); the detail is in the Monitoring and Reporting Regulation (MRR, Implementing Regulation (EU) 2018/2066) and the Accreditation and Verification Regulation (AVR, Implementing Regulation (EU) 2018/2067) 1112. Our EU ETS hub explains the system as a whole.

What happens in an EU ETS year, and when?

The cycle runs on fixed yearly dates, and two years overlap: in the spring and summer you close the previous year while you already monitor the current one 129. For 2026 emissions, the verified report is due by 31 March 2027 and the allowances by 30 September 2027; that is our calculation from the law's "each year" dates 40.

Free allocation, the allowances some installations get without paying, has its own rules; our explainer on free allocation covers who gets how many 19.

Who follows which rule?

Installations and aircraft operators follow the same articles of the ETS Directive on monitoring, verification, surrender and penalties (Articles 12, 14, 15 and 16) 12910. Their monitoring plans are approved in different ways: through the permit for an installation, and under Article 3g for an aircraft operator 51323. Shipping companies are monitored and verified under the maritime rules, and municipal waste incinerators only monitor, report and verify 23424. All three groups that surrender allowances do so by 30 September 1.

The 31 March rule in Article 15 names operators and aircraft operators only 2. Our shipping explainer gives the shipping dates, and the installations explainer shows whether an installation is covered at all.

What must the monitoring plan contain?

The monitoring plan sets out how the operator measures its emissions, and it needs the competent authority's approval 12. It documents the monitoring method of the specific installation in detail and contains at least the elements in Annex I of the MRR 12. For an installation, those include 27:

• A description of the installation, its activities and the emission sources and source streams (the fuels and materials) to be monitored 27
• Who is responsible for monitoring and reporting, and how the plan is checked regularly 27
• The written procedures for handling the data and for the controls on it 27
• The calculation methods, the tiers (accuracy levels) applied and the measuring instruments used 27
• The plan's version number, the date it applies from and the category of the installation 27

The plan goes in with supporting documents: evidence that the measurements meet the uncertainty thresholds, and the results of a risk assessment of the control procedures 12. The competent authority issues the permit only if it is satisfied that the operator can monitor and report its emissions 5. Commission guidance, not law: the Commission publishes templates for monitoring plans, annual emissions reports, verification reports and improvement reports, including Template No. 1 for the monitoring plan of a stationary installation 28.

Which category is my installation in?

The category follows the installation's average verified yearly emissions in the previous trading period 29. The law counts them "with the exclusion of CO2 stemming from zero-rated carbon and before subtraction of transferred CO2": leave out CO₂ from zero-rated carbon, such as biomass that meets the EU sustainability criteria, and don't subtract CO₂ transferred out of the installation 929. On that basis:

• Category A: 50,000 tonnes of CO₂e or less 29
• Category B: more than 50,000 and up to 500,000 tonnes 29
• Category C: more than 500,000 tonnes 29

The category sets how often improvement reports are due and the verifier's materiality level: a share of the total reported emissions against which the verifier judges whether misstatements in the report are material (see below) 203031. An installation with low emissions, below 25,000 tonnes of CO₂e a year on average, counted on the same basis, can be allowed a simplified monitoring plan and is spared the supporting documents 32.

When do I have to change the monitoring plan?

You must check the plan regularly and change it at least when the facts behind it change 33. That includes new emissions from new activities, fuels or materials; better data from new measuring instruments; data found to be wrong; a request from the authority; and suggestions in a verification report 33.

Tell the competent authority about any proposed change without undue delay 17. The authority can let you notify changes that aren't significant by 31 December of the same year 17. Significant changes need its approval; for an installation, they include a change of category where it requires a change to the monitoring method or changes the verifier's materiality level, a new source stream or a change in the tier applied 17. A planned change to the installation itself, such as extending or significantly reducing its capacity, must also be reported, because the permit may need updating 34.

How do I report my emissions?

Submit an emissions report covering the calendar year to the competent authority by 31 March of the following year, verified under the AVR 8. Your authority can ask for it earlier, but not before 28 February 8. The verification report goes in together with the emissions report 21.

The report must contain at least the information in Annex X of the MRR 8. For an installation, that includes the reporting year, the verifier's name and address, the version of the monitoring plan used, and for each source stream the total emissions in tonnes of CO₂e, the tiers and the activity data 35. Commission guidance, not law: Template No. 4 is the Commission's form for the annual emissions report of a stationary installation 28.

If no verified report arrives by the deadline, or the report isn't verified, the competent authority makes a conservative estimate of your emissions 36.

When is an improvement report due?

If the verification report lists non-conformities you haven't fixed or recommends improvements, send the authority a report by 30 June of the year the verification report was issued, saying how and when you will act 20. The authority can set another date, but no later than 30 September of that year 20. Operators that don't apply the tiers the MRR requires also send a regular improvement report by 30 June: every five years for category A, every three years for category B and every two years for category C 20. Installations with low emissions are spared the report on the verifier's recommendations 32.

What does the verifier check?

An accredited verifier checks that your report is complete, that you followed your permit and monitoring plan, and that the data are free from material misstatements 611. Material misstatements are uncorrected misstatements that, alone or added to others, "have a material effect on the reported total emissions" 31. The verifier must be independent of you and of the competent authorities 11. It visits the site to check the measuring devices and monitoring systems, and you must give it access 37.

The verifier's materiality level is 5% of the total reported emissions for category A and B installations, and 2% for category C 30. It can also treat smaller misstatements as material when their size and nature justify it 31. If the verifier finds misstatements or non-conformities, it asks you to correct them, and you must 31.

The verification report ends with one of four opinions 21:

• The report is verified as satisfactory 21
• It contains material misstatements that weren't corrected 21
• The scope of verification was too limited to reach an opinion 21
• Non-conformities make it impossible to state with reasonable assurance that the report is free from material misstatements 21

Only the first opinion meets the 31 March rule: if your report isn't verified as satisfactory by 31 March, you can't transfer allowances until it is 2. In the Union Registry, an account whose previous year's emissions aren't marked as verified on 1 April is blocked, and it opens again once they are 18.

How do I surrender allowances?

You surrender in the Union Registry by proposing a transfer of the allowances from your operator account into the Union Deletion Account, recorded as surrendered for your emissions 16. The number must equal your total verified emissions of the previous calendar year, and the surrendered allowances are then cancelled 1. An allowance already surrendered can't be surrendered again 16.

If you are short, you can get allowances from another holder before the deadline: allowances can be transferred between persons in the EU 1. If, on 1 October, an installation or aircraft operator that receives free allocation has surrendered fewer allowances than its verified emissions, the Union Registry blocks its account until the overdue allowances are surrendered 22.

What happens if I miss a deadline?

Missing the surrender deadline costs an excess emissions penalty of €100 for each tonne of CO₂e not covered by allowances on 30 September 10. For allowances issued from 1 January 2013, the penalty increases in line with the European index of consumer prices 10. The law doesn't state today's indexed amount, and we found no official figure, so we give none. Commission guidance, not law: the penalty "increases every year, based on the EU inflation rate" 28.

Paying the penalty doesn't end the debt: the missing allowances must still be surrendered with those for the following year 10. EU countries publish the names of operators, aircraft operators and shipping companies that don't surrender enough 10. For other breaches, each EU country sets its own penalties, which must be effective, proportionate and dissuasive 10.

The Directive has two last-resort measures. An aircraft operator that still doesn't comply can face an operating ban, decided by the Commission at its administering Member State's request 10. A shipping company that fails to surrender for two or more reporting periods in a row can get an expulsion order. Every EU country except the one whose flag the ship flies then refuses its ships entry to its ports; the flag country detains the ship instead 10.

Example: what a shortfall costs

Example, with figures we made up: an installation's verified emissions for 2026 are 12,000 tonnes of CO₂e, and by 30 September 2027 it has surrendered 11,000 allowances 40.

• It is 1,000 allowances short, so 1,000 tonnes of CO₂e aren't covered 40
• The penalty at the base rate is €100,000, before the increase for consumer prices, which would make it higher 1040
• It still owes the 1,000 allowances, on top of those for its 2027 emissions, by 30 September 2028 1040

Will the July 2026 review change these dates?

Commission proposal COM(2026) 616 of 17 July 2026 would change how much some groups surrender, such as a deduction for aircraft operators' costs under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and a phased surrender obligation for waste incineration installations from 2031; it is a proposal, not law 38. Our reading of its text: it doesn't change the 31 March verification rule, the 30 September surrender date or the penalty 121038. Our Decode on what the July 2026 review would change follows it 38.

What to do

1. Check whether the EU ETS covers your installation, with our installations explainer 4.
2. Before you start, get your monitoring plan in place if you run an installation or are an aircraft operator; a shipping company follows the maritime rules instead.

• If you run an installation, submit your monitoring plan for approval and get a greenhouse gas emissions permit, which contains it 51213. Then request your Union Registry account within 20 working days of the permit entering into force 15.
• If you are an aircraft operator, send your monitoring plan to the competent authority of your administering Member State at the latest four months before your flights start 2325.
• If you are a shipping company, monitoring and reporting follow Chapter II of Regulation (EU) 2015/757 instead: see our shipping explainer 24.

1. During the year, monitor under the plan, and tell the authority about changes to the plan or to the installation 1734.
2. Appoint an accredited verifier and give it access to your sites and information 63739.
3. By 31 March, or the earlier date your authority sets, submit the verified emissions report with the verification report 821.

• If the report isn't verified as satisfactory, you can't transfer allowances until it is 2.

1. By 30 June, send an improvement report if the verifier listed unresolved non-conformities or recommendations 20.
2. By 30 September, surrender allowances for the previous year's verified emissions in the Union Registry 116.

• If you are short, get the missing allowances from another holder before then; otherwise you pay the penalty and still owe them 110.

This is general information, not legal advice. For decisions about your company, check with a lawyer or adviser.