Understanding the EU carbon Emission Trading Scheme (EU ETS) - Compliance and business strategy

Over the past decade, the focus on environmental issues has grown exponentially, resulting in various global commitments and initiatives aimed at transforming current institutional, economic, and financial models.

The EU Emission Trading System (EU ETS) is the world's largest carbon market, designed to reduce Greenhouse Gas (GHG) emissions efficiently through a cap-trade mechanism. As the EU strengthens its climate policies under the Fit for 55 package, the ETS is expanding to more sectors, stricter caps, and higher carbon pricing, significantly impacting industries such as energy, manufacturing, aviation, and shipping.

Understanding the regulatory obligations, financial risks, and opportunities for carbon reduction strategies is critical for businesses navigating this evolving landscape.

This training will provide a comprehensive yet practical approach to the EU ETS, helping organisations manage compliance and leverage emissions trading as a competitive advantage.

By the end of this training, participants will:

• gain a clear understanding of the EU ETS, how it works, recent reforms;
• learn about compliance obligations, affected industries, and penalties for non-compliance;
• explore financial and strategic risks, including carbon pricing impacts;
• identify decarbonisation opportunities and corporate strategies to minimise exposure;
• understand how carbon markets, offsets, and trading mechanisms can be leveraged.

• Introduction to the EU Emission Trading Scheme (EU ETS)
  • What is carbon trading, and how does the cap-trade system work?
  • Evolution of the EU ETS: from Phase I to the latest reforms under Fit for 55
  • The role of carbon pricing in the EU Green DealKey milestones and deadlines for businesses
• Key regulatory requirements and compliance obligations
  • Who is covered? (energy, industry, aviation, shipping, and future expansions)
  • Emission allowances and caps: how the allocation process works
  • Monitoring, Reporting, and Verification (MRV) requirements
  • Penalties for non-compliance and enforcement mechanisms
• Financial and business risks of EU ETS
  • Rising carbon costs: how companies are impacted by higher carbon prices
  • Risk of stranded assets - Transition risks for carbon-intensive industries
  • Carbon leakage risks and international trade implications
  • Interaction with Carbon Border Adjustment Mechanism (CBAM)
• Opportunities: corporate strategies for carbon management
  • Reducing carbon exposure: energy efficiency, electrification, fuel switching
  • Carbon trading and offset strategies - How companies can buy, sell, or trade allowances
  • Investment in low-carbon technologies renewables
  • Accessing EU funding and incentives for decarbonisation
• Next steps for businesses
  • Preparing for tighter carbon caps and pricing volatility
  • Aligning internal teams (compliance, finance, sustainability)

This training is coordinated by Michael Horvath and Julien Jacqué, Partners at PwC Luxembourg.

Michael has acquired a strong financial and regulatory audit as well as advisory background and significant experience leading projects in the asset management sphere.

In the recent past, Michael has been particularly involved in various regulatory projects related to the implementation of the EU regulatory framework for sustainable finance (i.e. SFDR, taxonomy regulation, CSRD) at entity and product level. Michael is involved in various other regulatory projects for clients, from DORA, AML/CFT regulation over CSSF circular 18/698 to MICA.

Julien is the EMEA Sustainability in Finance Transformation Leader at PwC and is actively engaged in PwC EMEA’s CSRD Centre of Excellence. With over 11 years of consulting experience, he currently oversees PwC LU’s Sustainability Reporting and Transformation services.

Julien holds a degree in Mechanical Engineering and Corporate Finance and has provided extensive support to clients in the implementation of data and technology solutions. Over the past few years, he has assisted both financial and corporate clients in their sustainability journey, spanning strategy, transformation, and reporting. Julien possesses both theoretical knowledge and practical expertise in ESG regulations such as CSRD, EU Taxonomy, EU ETS, and CBAM.