ETS, ETS2 and ERE-E: what is the difference?

ETS puts a price on emissions

The EU ETS covers energy companies, heavy industry, aviation and maritime transport, among other activities. Participating companies measure their emissions and surrender allowances to cover them. One allowance represents one tonne of CO2 equivalent. The total supply of allowances falls each year.

Companies buy allowances at auction or from other market participants. Some sectors still receive a share for free. Surplus allowances can be kept or sold.

Auction proceeds go to Member States and European funds, including the Innovation Fund and Modernisation Fund. Member States must spend their proceeds, or an equivalent amount, on climate and energy measures. In a subsequent trade, the payment goes to the seller.

ETS2 applies to fuel suppliers

ETS2 is a separate system for fuels used in road transport, buildings and some other sectors. The obligation sits with the fuel supplier, which may pass the cost on through fuel prices.

The NEa timetable puts the start of auctions in early 2027. The first emissions year requiring allowances is 2028, with surrender due by 31 May 2029. Monitoring and reporting have already started.

ETS2 allowances can also be traded. They cannot be exchanged for EU ETS allowances. Auction revenues support climate and social measures, including through the Social Climate Fund.

ERE-E comes from electricity supplied to transport

Electricity suppliers can receive ERE-E by registering eligible supplies to transport in the Dutch Register Energie Vervoer (REV). The units reward the renewable share of that electricity.

Fuel suppliers buy EREs to meet their Dutch fuel transition obligation. Revenue goes to the seller. How that revenue is shared depends on agreements between the registered grid connection holder, operator and any registration service provider.

An ERE-E does not permit emissions or cover an ETS or ETS2 obligation. Applying for a grant is also separate from registering electricity.

Keep the cash flows separate

For a charging hub, terminal or shore power site, these systems affect different parts of the accounts. ETS and ETS2 can affect energy and fuel costs. Grants can reduce investment costs. ERE-E can provide revenue from electricity actually supplied to transport.

Before including that revenue, establish which supplies qualify, who can register them, and which costs and sales terms apply. PYK Power helps check meter data and supporting documents. Dashboard values remain estimates until registration, verification and sale are complete.