--- description: "Under the EU Emissions Trading System (EU ETS), handing in allowances equal to the previous calendar year's verified emissions, by 30 September each year. The surrendered allowances are then cancelled." title: "Surrender of allowances: meaning and legal source" image: "https://greenfineprint.com/card/glossary/surrender-of-allowances.png?v=1182tze" url: "https://greenfineprint.com/glossary/surrender-of-allowances" --- Glossary # Surrender of allowances Under the EU Emissions Trading System (EU ETS), handing in allowances equal to the previous calendar year's verified emissions, by 30 September each year. The surrendered allowances are then cancelled. Legal source [ETS Directive, Article 12(3) ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02003L0087-20240301#art%5F12) Who it applies to Operators of installations, aircraft operators and shipping companies. Shipping companies surrender for 100% of their verified emissions from the 2026 emissions on, after 40% for 2024 and 70% for 2025. Installations incinerating municipal waste are covered only for the purposes of monitoring, reporting and verification, so under the law in force they have nothing to surrender. Example An installation's verified emissions for 2026 are 12,000 tonnes of CO₂ equivalent. By 30 September 2027, its operator must surrender 12,000 allowances, by transferring them in the Union Registry into the Union Deletion Account. Also known as surrender, surrendering allowances, allowance surrender 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](https://greenfineprint.com/glossary/emission-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](https://greenfineprint.com/articles/eu-ets-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](https://greenfineprint.com/glossary/cbam-certificate) for the embedded emissions declared for the year before. ## Regulations DIRECTIVE 2003/87/EC In force Change pending ### [EU Emissions Trading System (EU ETS)](https://greenfineprint.com/regulations/eu-ets) Implementing Decision (EU) 2026/1862 set the cross-sectoral correction factor for free allocation at 100% for each year from 2026 to 2030 ## Used in PROPOSAL COM(2026) 153 In force Change pending ### [EU ETS market stability reserve: what the provisional deal on invalidating allowances would change](https://greenfineprint.com/articles/eu-ets-market-stability-reserve-invalidation) Council and Parliament provisionally agreed to keep invalidating EU ETS reserve allowances, but above 700 million instead of 400 million. Not law yet. 6 min read PROPOSAL COM(2026) 616 In force Change pending ### [EU ETS review 2026: what the Commission's proposal would change, for whom and from when](https://greenfineprint.com/articles/eu-ets-review-changes) What the Commission's July 2026 EU ETS review proposal would change for installations, ships, flights, waste incinerators and EU countries, and from when. 16 min read DIRECTIVE 2003/87/EC In force Change pending ### [EU ETS for shipping: what shipping companies must surrender, and who pays](https://greenfineprint.com/articles/eu-ets-shipping) EU ETS for ships of 5,000 gross tonnage and above carrying cargo or passengers to or from EU ports: which voyages count, what to surrender and who pays. 13 min read DIRECTIVE 2003/87/EC, ART. 10A AND 10B In force Change pending ### [EU ETS free allocation: benchmarks, the carbon leakage list and how free allowances are cut](https://greenfineprint.com/articles/eu-ets-free-allocation) How EU ETS free allowances are worked out for 2026-2030: benchmarks, the carbon leakage list, the 20% conditions, the CBAM factor and two pending proposals. 15 min read DIRECTIVE 2003/87/EC In force Change pending ### [EU ETS compliance deadlines: monitor, verify and surrender allowances each year](https://greenfineprint.com/articles/eu-ets-compliance-cycle) EU ETS operators must report verified emissions by 31 March and surrender allowances by 30 September. Each step, who acts, and what a shortfall costs. 10 min read DIRECTIVE 2003/87/EC In force Change pending ### [EU ETS scope: does it apply to your installation, and can small emitters be excluded?](https://greenfineprint.com/articles/eu-ets-installations-scope) Fuel-burning units totalling over 20 MW, or an Annex I activity over its threshold, put an installation in the EU ETS. 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