EU CBAM Hedging Strategies
The EU's Carbon Border Adjustment Mechanism (CBAM) will impose carbon costs on imports, linked to EU ETS allowance prices. Companies can manage these costs through financial and operational strategies.
2025 EU CBAM Possible Changes
Expanding on the proposed revisions to the EU's CBAM, it's crucial to understand the broader context and the specific nuances of these changes.
How Europe's ETS and CBAM Intersect
The European Union Emissions Trading System (EU ETS) has been a cornerstone of EU climate policy since 2005, operating as the world's first and largest international carbon market. This cap-and-trade system sets a limit on total greenhouse gas emissions from covered installations, including electricity generation, heavy industry, and
The EU CBAM
The EU's Carbon Border Adjustment Mechanism (CBAM) is a carbon-pricing system targeting imports of carbon-intensive goods.
European Auction Allowances
European Union Allowances (EUAs) are the cornerstone of the EU Emissions Trading System (EU ETS), serving as tradable permits that allow holders to emit one tonne of carbon dioxide (CO₂) or its equivalent.
The EU ETS
The European Union Emissions Trading System (EU ETS), established in 2005, marks a pivotal step in global efforts to combat climate change, serving as the world's first major international carbon market.