EU allowances (EUAs) are tradable permits under the EU Emissions Trading System (EU ETS) cap-and-trade program for regulated sectors. One EUA allows a company to emit one tonne of CO₂ equivalent.
The EU ETS is the world's largest carbon market and covers power generation, heavy industry, and intra-EU aviation. Companies that exceed their allocated allowances must purchase additional EUAs on the market, creating a financial incentive to reduce emissions. The price of EUAs fluctuates based on supply, demand, and regulatory changes. With the introduction of CBAM, the free allocation of EUAs to certain sectors is being phased out to prevent carbon leakage while maintaining competitiveness.
Understand your CBAM obligations and how they relate to EUA pricing, or use the CBAM cost calculator to estimate your carbon border adjustment costs.
See how Coolset helps companies with CBAM compliance and carbon cost management →
