Surrender of allowances

By 30 September each year, the operator of each installation surrenders a number of allowances equal to the installation's total emissions in the preceding calendar year, as verified; aircraft operators and shipping companies do the same for their own emissions. EU countries ensure that surrendered allowances are then cancelled. Each EU allowance covers one tonne of CO₂ equivalent.

In the Union Registry, an operator surrenders by proposing to transfer a number of allowances from its account into the Union Deletion Account, and to record them as surrendered for its emissions. An allowance already surrendered can't be surrendered again.

No surrender obligation arises for emissions verified as captured and transported for permanent storage to a permitted storage site, or for greenhouse gases permanently chemically bound in a product.

An operator or aircraft operator that doesn't surrender enough by 30 September pays an excess emissions penalty of €100 for each tonne of CO₂ equivalent not covered, and still has to surrender the missing allowances the following year. For allowances issued since 1 January 2013, the penalty rises with the European index of consumer prices. The Directive doesn't state today's indexed amount, so we don't give one here. The same penalties apply to shipping companies. Our explainer on the yearly compliance cycle covers the penalty and the steps before surrender.

The Carbon Border Adjustment Mechanism (CBAM) has its own surrender: by 30 September each year, authorised CBAM declarants surrender CBAM certificates for the embedded emissions declared for the year before.