The NEHG provides for relief measures for energy-intensive companies and carbon leakage

Main features of the National Emissions Trading Act (NEHG)

The National Emissions Trading Act 2022 introduced CO2 pricing for fossil fuels (petrol, diesel, heating oil, natural gas, LPG, coal and paraffin), meaning that certificates must now also be purchased for CO2 emissions generated in sectors that are not covered by the EU Emissions Trading System (EU ETS) (buildings, transport, agriculture, waste management and small industrial plants). Any legal entity or natural person that places fossil fuels on the Austrian market is a trading participant under the NEHG and must purchase CO2 certificates for the fuels placed on the market and submit quarterly greenhouse gas reports and an annual greenhouse gas emissions report. The transition phase begins on 1 January 2025. The transition phase serves to prepare the adaptation of NEHG to EU-ETS II. After the transition to the EU-ETS II system, NEHG is expected to expire on 31 December 2026. In EU ETS II, emission allowances will be auctioned in a cap-and-trade system. In the transition phase, the affected group of goods will be expanded so that most goods subject to mineral oil tax are now covered by NEHG. From 1 January 2025, registered companies must submit a monitoring plan in the online portal NEIS (National Emissions Allowance Trading Information System).

Relief measures in the NEHG

Energy-intensive companies can submit an application for proportional relief from the additional burden. The amount of relief granted is determined by official notice, taking into account any allotment in accordance with the budgetary ceilings. Those quantities of fossil fuels that were used for heating purposes and were finally charged are eligible for relief. Heating purposes include any use of energy sources for process heat and space heating within the scope of operational activities. In addition, there is an entitlement to relief for the purchase of heat, steam or hot water used directly for the production process if they were generated from energy sources eligible for relief. However, the prerequisite for relief is that the heat, steam or hot water is used for the production process in the technical sense, but not for the mere administrative activities of a production plant (e.g. heating, lighting, electrical supply of offices, etc.). For this purpose, the applicant must have a notification from the supplier stating the exact quantity of the energy source used (natural gas, coal or mineral oil) and the respective CO2 price. If the notification of these amounts is only summarized under the designation ‘energy levies’, it is not possible to allocate them to a specific fuel and thus to determine the amount.

An energy-intensive business exists if the energy levies paid and the costs of national emission allowances used for heating purposes exceed 0.5 per cent of the net production value for the calendar year (financial year) (this also includes the purchase costs for heat, steam or hot water used directly for the production process). Energy-intensive companies are reimbursed 45 per cent of the additional burden. In contrast to the energy tax rebate, the relief measure is not limited to production companies. Service companies can also take advantage of it.

The NEHG also defines economic sectors and parts of economic sectors that are eligible for relief. If a business falls into an economic sector as defined in Annex 2 NEHG, the extent of the relief increases in accordance with the percentage specified in Annex 2 (between 65 and 95 per cent). Subsequent recognition as an economic sector eligible for relief is also possible.

At least 80 per cent of the relief granted (at least 50 per cent in the introductory phase until 31 December 2024) must be invested in climate protection measures within the company concerned, for example to implement energy efficiency measures. Proof of this must be provided within 12 months of payment, unless the implementation of a climate protection measure extends over a longer period.

Deadlines
 

The application for the relief measure for energy-intensive companies and carbon leakage for the previous calendar year (financial year) must be submitted to the Office for National Emissions Trading (AnEH) electronically in the NEIS from 1 May of the following year until 30 June of the following year only with a review opinion from a tax advisor, auditor or accountant. Deviating from this, the application for the calendar years 2022 and 2023 must be submitted by 30 November 2024. Incomplete applications will not be considered.

Conclusion

The relief measures for energy-intensive companies and carbon leakage partially cushion the additional burden from the payment of emission allowances. Energy-intensive companies should find out whether they are covered by the relief measures in the NEHG. It should be noted here that primarily energy levies used for heating purposes can be taken into account. However, there is also the possibility of relief of energy levies for the purchase of heat, steam or hot water used directly for the production process if they were generated from energy sources eligible for compensation.