Emissions Trading

We advise industrial operators, energy companies and their investors on the EU Emissions Trading System (EU ETS) in the Netherlands. That covers emission permits, monitoring plans, allocation of allowances, transactions and disputes with the Dutch Emissions Authority (NEa). We work in English and Dutch; the first step is a free introductory meeting in which we review your installation's position and deadlines.

What can we help you with?

• you are building or expanding an installation and need to know whether it falls under the EU ETS;
• you need a greenhouse gas emissions permit or a change to your monitoring plan;
• your free allocation is reduced, for example after a drop in production;
• the NEa announces an inspection, an order subject to a penalty or a fine;
• you buy or sell an installation, or a site with several operators, and allowances are part of the deal;
• you want to know how the Carbon Border Adjustment Mechanism (CBAM) affects your products or supply chain;
• you want to object to or appeal against a decision of the NEa.

How does the EU Emissions Trading System work?

The EU ETS sets a cap on the total greenhouse gas emissions of covered installations, which decreases every year. For each tonne of CO2 equivalent emitted, an operator must surrender one emission allowance.

The system is based on Directive 2003/87/EC and is now in its fourth trading period, 2021 to 2030. In the Netherlands, it is implemented mainly in Chapter 16 of the Environmental Management Act (Wet milieubeheer). The Dutch Emissions Authority (Nederlandse Emissieautoriteit, NEa) is the competent authority. It issues permits, approves monitoring plans and enforces compliance.

The ETS covers, among others, power and heat generation, refineries, steel, cement, chemicals and other energy-intensive industry. Combustion installations with a total rated thermal input above 20 MW fall under it. Aviation within Europe and, since 2024, maritime transport are also included. A separate system for fuels used in buildings and road transport (ETS2) is being introduced; its start date has been the subject of EU-level discussion.

Which permit and monitoring plan do you need?

An operator of an ETS installation needs a greenhouse gas emissions permit from the NEa and an approved monitoring plan. Without a permit, you may not emit greenhouse gases from the installation.

The monitoring plan describes how you measure or calculate emissions: sources, source streams, calculation methods, measuring equipment and uncertainty levels. It follows the EU Monitoring and Reporting Regulation (Regulation (EU) 2018/2066). Significant changes, such as a new fuel or a new emission source, require prior approval of an updated plan.

The ETS permit is separate from the environmental permit under the Environment and Planning Act. Our page on environmental law covers that permit. When an installation changes, check both regimes.

Which annual deadlines apply?

Every year, you submit a verified emissions report by 31 March and surrender allowances for the previous year's emissions by 30 September. Missing these deadlines leads to sanctions.

The emissions report must be verified by an accredited independent verifier. Plan the verification well in advance, because verifiers are busy in the first quarter.

How does free allocation of allowances work?

Installations in sectors at risk of carbon leakage receive part of their allowances free of charge, based on EU product benchmarks. The rest must be bought, at auction or on the market.

Free allocation is calculated per sub-installation, based on historical activity levels and benchmarks set by the European Commission. If your activity level changes by more than 15 per cent, the allocation is adjusted. Errors in the baseline data can therefore cost allowances for years.

Under the Carbon Border Adjustment Mechanism (CBAM), free allocation for sectors such as cement, steel, aluminium, fertilisers and hydrogen is phased out gradually from 2026. Importers of those goods pay a CBAM charge instead. This changes the business case of many installations and long-term supply contracts. Our energy lawyer page covers related energy contracts.

What happens if you do not comply?

An operator that does not surrender enough allowances on time pays an excess emissions penalty of 100 euros per tonne of CO2, indexed for inflation. The missing allowances must still be surrendered.

For other breaches, the NEa can impose an order subject to a penalty (last onder dwangsom) or an administrative fine. Examples are incorrect monitoring or operating without a permit. Before a decision, you usually get the chance to give your view. Use it: a well-documented response can limit or prevent a sanction.

Against NEa decisions, you can lodge an objection within six weeks and then appeal to the administrative court. Our guide to administrative objections and appeals explains the steps. Official guidance is published by the Dutch Emissions Authority.

How does working with Law & More work?

1. Introductory meeting: you explain your installation or question, and we check deadlines and pending decisions.
2. Advice and cost estimate: we assess your obligations, risks and options, and give a cost estimate.
3. Approach and negotiation: we draft submissions, views and contract clauses, and conduct discussions with the NEa or counterparties.
4. Proceedings or completion: if needed, we file an objection or appeal, or complete the transaction documentation.

What do emissions trading lawyers cost?

Our hourly rate is 250 to 350 euros excluding VAT for a lawyer and 300 to 400 euros excluding VAT for a partner. We discuss the rate and an estimate in advance. The introductory meeting is free of charge. A one-off advice meeting without further assistance costs 300 euros including VAT.

External costs, such as court fees, verifier fees and technical experts, are charged separately. Legal aid exists via the Legal Aid Board (Raad voor Rechtsbijstand), but we do not work on that basis.

Who handles your case?

Emissions trading matters are handled by Tom Meevis, founder and managing partner, who handles our energy law work. You can see the whole team on our team page.

Frequently asked questions

Does my installation fall under the EU ETS?

That depends on the activity and capacity. Combustion installations with a total rated thermal input above 20 MW are covered, as are specific industrial activities such as refining, steel, cement and certain chemicals. The thresholds are listed in Annex I of the ETS Directive. A capacity check per installation is the first step.

When must allowances be surrendered?

Allowances for the emissions of a calendar year must be surrendered by 30 September of the following year. The verified emissions report must be submitted to the NEa by 31 March. If you surrender too few allowances, you pay an excess emissions penalty and must still surrender the missing allowances.

What do emissions trading lawyers do that a consultant does not?

Technical consultants and verifiers handle measurement and calculation. Emissions trading lawyers advise on the legal side: permits, enforcement, objections and appeals, contracts and the allocation of ETS costs and risks in transactions. On complex installations, the two roles work well together.

Can I challenge my free allocation?

Yes. A decision on free allocation can be challenged through objection and appeal under Dutch administrative law. Questions about the validity of EU allocation rules can end up at the Court of Justice of the European Union through a preliminary reference. Deadlines are short, usually six weeks from the decision.

What happens to allowances when an installation is sold?

Allowances are held in a registry account, not attached to the installation itself. The purchase agreement must therefore regulate which allowances transfer, who surrenders for which period and who bears the cost. A change of operator must also be reported to the NEa, which handles the permit. Without clear clauses, disputes about the surrender year are common.

How does CBAM affect my business?

If you import goods such as steel, aluminium, cement, fertilisers, hydrogen or electricity into the EU, CBAM applies. Importers must report embedded emissions and, during the definitive period, pay for them through CBAM certificates. Producers in these sectors lose their free allocation gradually, which affects pricing and contracts.

In doubt about your position? Tell us about your situation. We will let you know within one working day what your options are. Contact us, call +31 40 369 06 80 or e-mail info@lawandmore.nl.

Law & More, Marconilaan 13, 5612 HM Eindhoven (+31 40 369 06 80) and visiting location Pietersbergweg 291, 1105 BM Amsterdam (+31 20 369 71 21). Available Monday to Friday 08:00-22:00, Saturday and Sunday 09:00-17:00.

This page provides general information and does not replace advice on your specific situation.