Industries
For a cement producer it arrives through free allocation. For an airline it arrives twice, in two schemes. For a data centre it arrives as a claim it has to be able to prove. The mechanism decides the hedge.
The front line of EU ETS. Process emissions cannot be engineered away quickly, free allocation is being withdrawn on a published schedule, and CBAM now puts a price on the imported alternative at the same time. Both sides of the substitution decision move together.
Two overlapping regimes and a fuel mandate. EU ETS applies to intra-EEA flights, CORSIA to international routes, and the SAF blending obligation prices part of the fuel bill in a market with very different liquidity to jet.
EU ETS maritime and FuelEU Maritime together turn a vessel’s fuel choice into a compliance position. Who carries that cost between owner and charterer is a contractual question with a hedgeable answer.
Energy intensity and process emissions on the same site, with feedstock-switching and hydrogen decisions that only make sense against a forward carbon curve rather than today’s spot price.
The carbon price sits inside the merit order rather than beside it. Clean spark and dark spreads, PPA structuring and guarantee-of-origin sourcing across delivery zones are a single optimisation, not three.
Load growth meeting a public clean-energy commitment. Annual certificate matching is increasingly challenged, and hourly matched procurement changes both the sourcing problem and its cost.
EU ETS 2 brings an allowance cost into road fuel from 2027, passed through by suppliers. Fleet operators and fuel distributors are already being asked to price it into multi-year contracts.
Counterparties who need execution and market colour rather than advice: liquidity in environmental products, cross-market views and structures that are difficult to assemble from exchange instruments alone.
Common ground
Measured per compliance year, net of free allocation and any pass-through you can already recover.
If the cost moves through to your customers, hedging it may create a basis risk you did not have before.
The reporting format should be agreed before the first trade, not reverse-engineered at year end.
Next step
The mechanism matters more than the label. Describe your obligation and we will tell you whether we are the right counterparty for it.