Emission trading services

Emissions trading services

Policymakers around the world are turning to carbon pricing as the most efficient way to reduce emissions. One popular approach is emissions trading, which has taken off since the EU launched the world’s first Emissions Trading System (ETS) in 2005. There are now 17 such schemes located across four continents, and the trend is set to continue, with half of the signatories to the Paris Agreement expressing interest in using carbon markets to meet their targets. Emissions trading damages industry profitability if allowances have to be bought and electricity prices rise due to generators passing on their emissions costs. It is vital, therefore, that policymakers use free allocation and offer compensation for electricity costs when designing schemes: this protects industry without undermining environmental outcomes or affecting consumer prices. EU policymakers are currently agreeing the rules for the fourth EU ETS phase (2021-30), which will have a significant impact on industry. Proposals under consideration could restrict free allocation, raise carbon prices, and limit compensation for electricity costs. Meanwhile, Canadian policymakers are finalising plans for a regional ETS in Ontario, and China is agreeing the rules for its national ETS, which will be the largest in the world when it launches in 2017.

EU Matrix has extensive expertise in emissions trading policy and offers a comprehensive range of services. We can help your company track ETS developments, model financial impacts, understand compliance requirements, and devise market strategies, as well as engage with policymakers to minimise exposure and take full advantage of opportunities for funding and compensation.