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EXPERTISE
CBAM
● The EU is introducing the world’s first carbon border adjustment, with reporting obligations since 2023 and a carbon price on imports from 2026.
● The UK will follow in 2027, while other countries are developing similar mechanisms, restricting market access for carbon-intensive goods.
● CO₂-based import duties interact with tariffs and trade barriers, impacting global markets and supply chains.
● Companies must factor in rising carbon costs and secure competitiveness by sourcing from low-carbon suppliers.
New Cost Structures in Global Trade:
Carbon border adjustments (CBAM), green tariffs, and CO2 standards are reshaping competitive conditions for companies with international supply chains.
Carbon Markets
● The EU Emissions Trading System (ETS I) for energy and industry is expanding to buildings and transport (ETS II), further increasing CO₂ costs.
● The voluntary carbon market is evolving with new quality standards (e.g., Article 6), unlocking opportunities for high-integrity carbon credits.
● Green lead markets and market premiums are accelerating demand for low-carbon products and strengthening sustainable business models.
Regulated and Voluntary Trading as a Driver of Transformation:
Emissions trading systems, market-based instruments, and green premiums create economic incentives for decarbonization and new market opportunities.
Green Tech
● Low-carbon technologies such as biomethane, hydrogen, and sustainable aviation fuels (SAF) are becoming commercially viable and scalable.
● Carbon Capture and Storage (CCS) is driving demand for CO2 transport and storage infrastructure, enabling new business models.
● Carbon Capture and Utilization (CCU) allows industrial use of CO2 as a raw material for carbon-based products.
● Carbon Dioxide Removal (CDR) is creating tradable negative emissions, gaining traction in corporate climate strategies.
Net-Zero Innovation as a Market Opportunity:
Political climate targets require net-zero emissions within the next 25 years, creating growth markets for decarbonization and active CO2 management solutions.
Sustainable Finance
● Government programs such as EU initiatives, or national subsidy schemes and carbon-contracts-for-difference (CCfD) support industrial decarbonization.
● Investors are prioritizing green credit lines and innovative financing instruments for CO2 reduction and Net-Zero transition plans.
● Sustainability reporting (CSRD) and ESG data are becoming essential for capital access and investor relations.
Access to Capital for the Net-Zero Transition:
Funding opportunities and investment returns are increasingly linked to ESG criteria, Net-Zero commitments, and emission reduction targets.
Climate Risks
● New disclosure requirements (CSRD, TCFD) demand detailed climate risk assessments and financial stress tests for resilience.
● Extreme weather events disrupt production, logistics, and global supply chains, increasing operational risks.
● Carbon-intensive business models face growing pressure as investors and customers prioritize climate-aligned alternatives.
Building Resilient Business Models in a Changing Climate:
Regulatory and physical climate risks are directly impacting business models, earnings, and supply chains.
New Carbon Factors Shape Your Financials
Carbon pricing, investment incentives, and regulatory frameworks are making CO2 a decisive factor in business profitability across all industries.
CO2 IQ brings together expertise on all key financial drivers: