Monitoring, reporting and verification of EU ETS emissions

Operators in the EU Emissions Trading System (ETS) must surrender annually the number of allowances corresponding to their emissions in the preceding year. For each tonne of emissions for which no allowance is surrendered in due time, there is a penalty of EUR 100. This is on top of the cost of surrendering allowances due. Names of the penalised operators are also disclosed to the public.

Since 2012, the penalty of EUR 100 per tonne of emissions of CO2 or the equivalent amount of N2O or PFCs (which are greenhouse gases the EU ETS regulates) increases annually in line with the European consumer price index, in accordance with Article 16(4) of the ETS Directive. The reference to the "European index of consumer prices" should be understood as referring to the European Union Consumer Price Index (CPI), to the Harmonized Index of Consumer Prices (HICP) of the European Union or to the Eurozone CPI/HICP.

The index used to calculate the increase in consumer prices since 2012 applied to the €100 penalty for non-compliance in the EU ETS is the HICP (specifically, the European index of consumer prices - EICP).

To calculate the penalty increase, either a cumulative or annual update can be used. The ETS Directive excludes the penalty decreasing below €100 if the HICP change since 2012 were to be a decrease.

You may use the HICP published in the Eurostat database "HICP (2005 = 100) - annual data (average index and rate of change) (prc_hicp_aind)".