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 Horvath is a partner at PwC with extensive expertise in sustainable finance and the asset management industry, including both financial and real assets. Since joining PwC Switzerland in 2011 and PwC Luxembourg in 2018, he has led significant projects in regulatory audit and advisory, focusing on the asset management sector. Michael has played a key role in implementing the EU regulatory framework for sustainable finance, including SFDR, taxonomy regulation, and CSRD, as well as other regulatory initiatives such as DORA, AML/CFT, CSSF circular 18/698, and MICA. He is a certified public accountant in Switzerland and Liechtenstein and has contributed to designing compliance frameworks and operational implementations driven by regulatory changes. His notable client projects include defining target operating models for Luxembourg AIFMs, digital operational resilience planning, AML/CFT framework implementation, and ESG/sustainability process design, supported by his involvement in training and regulatory advisory.

Julien Jacqué is a partner in PwC Luxembourg’s technology consulting department, co-leading the ESG Non-financial sector service offering and ESG Data & Technology services across sectors. With over 12 years of experience, he supports operational and financial clients in launching Sustainability and ESG transformation programs, guiding them from ESG strategy definition to business model transformation and regulatory reporting. Specialising in transport, logistics, manufacturing, and financial services, Julien leads large-scale transformation projects and international teams, including ESG reporting upgrades for telecom clients. His expertise includes ESG strategy, Net Zero, business intelligence platforms, and end-to-end project leadership for major clients in Europe and beyond.