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ARTICLE · 17 OCTOBER 2024

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Security Over EU ETS Allowances: A French Legal Perspective

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As the European Union doubles down on its commitment to reducing greenhouse gas emissions, EU Emission Trading System (EU ETS) allowances have become not only an environmental...

European UnionEnvironment
Anne Lapierre
Anne Lapierre
Véronique Bruel
Véronique Bruel

As the European Union doubles down on its commitment to reducing greenhouse gas emissions,1 EU Emission Trading System (EU ETS) allowances have become not only an environmental tool but also a valuable financial asset. While in 2017, the price of a carbon credit (one ton of CO₂) was around €5–7, by the end of 2020, prices had increased to around €30–€35 per ton. They continued increasing dramatically in 2021, reaching over €60 per ton and finally €90 in 2022 and currently remain on the high side. These allowances, which grant companies the right to emit a specific amount of carbon dioxide (CO₂) or equivalent greenhouse gases, are now being eyed as potential collateral in financial transactions in certain countries.2 But what does it mean to take security over EU ETS allowances, and what should companies and financial institutions be aware of?

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