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Emissions hedging

We are an active participant in the European Emissions Trading System (EU ETC). As such we can act as an EU Allowances (EUA) provider and help you comply with your obligations

What are emissions allowances?

The EU ETS Directive defines the emission allowance as being “an allowance to emit one tonne of carbon dioxide equivalent during a specified period, which shall be valid only for the purposes of meeting the requirements of this Directive and shall be transferable in accordance with the provisions of this Directive”.

EUAs are issued as electronic certificates which are held on electronic accounts with the Union Registry. The Union Registry serves to guarantee accurate accounting for all allowances issued under EU ETS.

 How does the process work?

The emissions certificate is physical item, a piece of paper, which is traded on the EU Emissions Trading System (EU ETS). EU ETS works on the cap and trade principle, which means that a cap is set on the total amount of CO2 that can be emitted by the system. Because of the 2% reduction of CO2 every year, the total emissions falls.

Within the cap, companies can buy and sell emissions certificate. That means that the companies who reduces more than the 2% expected and the additional certificates are extra credit which can be sold back to the market, and companies who needs can buy. 

 

Our role in the EU ETS and how we add value...

We are experts in commodities markets, in particular on emissions as such we will act as a liquidity provider through our market access and quote on spot and/or forward maturities. We can help our clients reach their compliance obligations through buying and selling of EUAs via our Union Registry account.