Summary and next steps

As part of the information event “Enforcement of the Fuel Emissions Trading Act” on 04.12.2020, the authority responsible for the Fuel Emissions Trading Act, DEHSt, provided further insights into the operational implementation with regard to the SESTA.

In this article we would like to give you a brief overview and explain what you will have to do in terms of opening an account at the national emissions trading registry and communicating with DEHSt via the virtual post office.

Opening an account with the national emissions trading registry

To participate, an account must be opened in the national emissions trading registry. The national emissions trading registry is a database in which the (electronic) allowances can be held and used. This is comparable to an online banking system.

From the point of view of the responsible person, the national emissions trading registry has the following tasks:

Account management: Includes account opening by the account holder and the appointment of proxies. Authorised representatives are natural persons who can be named by the account holder.

Trading: transfer of allowances

Fulfilment of obligations: Registration of emissions and surrender

Account types

A basic distinction is made between two types of account: The compliance account and the trading account.

With the compliance account as well as the trading account you are able to trade with certificates and participate in the selling process. Furthermore, both accounts can be opened by a SESTA officer upon request.

The difference between the two accounts, however, is that only one compliance account allows emissions to be entered and surrendered. This was therefore developed specifically for those responsible for SESTA (distributors).

The possibility of opening an account is planned to be made possible in spring 2021. The acquisition of certificates is planned to be possible from the second half of the year onwards via an authorised body by persons entitled to admission.

Further details on opening an account and information on the approval procedure will be provided by DEHSt/UBA.

We recommend that you aim to open an account as soon as possible and to pay at least to purchase 90% of the allowances needed for 2020 in 2021 in order to be able to purchase all allowances at the 2020 price in accordance with the post-purchase rule.

How to communicate with the DEHSt…

The DEHSt prescribes the purely electronic way with written form substitution via the Virtual Post Office (VPS) for communication. In this context, data messages sent to DEHSt (e.g. emission report, which is to be prepared using a form management system (FMS) yet to be set up) must be provided with a qualified electronic signature (QES). Beginning in 2022, QES and the establishment of a VPS mailbox will be required for the first time.

In addition, DEHSt plans to implement authentication via the EKONA identification service with an ELSTER company account directly in the nEHS registry for the transmission of applications to set up an account in the nEHS.

The concrete requirements for electronic communication pursuant to Section 17 BEHG will be published in the Federal Gazette.

In summary, communication with and from DEHSt takes place on three levels:

• The national emissions trading registry, a database for holding and using electronic allowances
• The virtual post office (VPS), as a purely electronic way with written form replacement for sending the necessary documents
• And the Form Management System (FMS), where the templates for the preparation of the necessary documents (e.g. emission report and monitoring plan) can be found.

We are happy to offer you our support in opening an account, managing the account, buying and selling certificates, preparing the emissions report using the FMS as well as setting up and communicating via VPS.

We will report in more detail on the topics of monitoring and reporting as well as sales via commissioned bodies in our next articles.

Author: Sina Barragan, GALLEHR+PARTNER

We carry out the following activities:

• Advice on the economic and procedural effects of the Fuel Emissions Trading Act (BEHG) on your company
• Advice for possible switch to EU-ETS
• Preparation and submission of the monitoring plan in accordance with §6 BEHG and continuous monitoring up to approval
• Verifiable determination of fuel emissions and preparation of the emissions report pursuant to § 7 para. 1, 2 SESTA
• Preparation and support of the verification of the emission report according to § 7 para. 3 SESTA
• Transmission of the verified emissions report to the competent authority (DEHSt) by 31.07 of the following year in accordance with §7 Para. 1 SESTA
• Verification of the avoidance of double charging in accordance with §7 Para. 5 SESTA
• Support in the establishment of accounts and account representatives in the national emissions trading registry pursuant to section 12 para. 2 SESTA for the administration of emission allowances pursuant to section 9 para. 1
• Support in the management of their register account e.g. as one of the authorized account holders
  • Verification of transfers
  • timely retransfers of emission allowances by 30.09 for the previous year pursuant to § 8 SESTA
  • Data updates of information in the register
  • Representation of historical account movements and balances on the basis of account statements
• Support in the purchase and sale of emission certificates
• Support with requests for information and assistance with on-site inspections by the competent authority pursuant to § 14 SESTA
• Identification of emission allowance price drivers and market monitoring
• Ad hoc announcements on relevant events, political developments and legislative changes
• Regular status and strategy meetings to strengthen decision-making capacity