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An EU ETS factsheet says:

A business is penalised if it does not surrender enough allowances. It has to buy allowances to make up the shortfall, is “named and shamed” by having its name published, and must pay a fine for each excess tonne of greenhouse gas emitted. In 2013, the fine amounted to €100 per tonne of CO2 (or the equivalent amount of N2O or PFCs). The penalty rises annually in line with the European consumer price index.

Where does this fine money go? Does it go to the member state like the primary auction money, or does it go into some EU budget?

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Given that member state authorities devise and impose the fines and the EU ETS general revenues themselves remain in the member states I cannot imagine that fines would be used differently. Also the fact that the amount of the fine itself is expressed as a carbon price points in this direction.

Article 16 of Directive 2003/87/EC states that:

The penalties provided for must be effective, proportionate and dissuasive. Member States shall notify these provisions to the Commission […]

The 2015 EU ETS Handbook states:

This fine is imposed by the relevant Member State authority.

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