CBAM Costs Rise Before Importers Can Even Buy Certificates

CBAM certificate prices follow the EU ETS auction price, so rising carbon costs reach importers before the certificates can even be bought. Leah Wieczorek, StoneX VP of Carbon Markets, explains how the EU carbon market and the Carbon Border Adjustment Mechanism shape costs for importers and exporters. The EU Emissions Trading System is a cap-and-trade scheme covering power generation, energy intensive industry, aviation and, since 2024, maritime shipping, with a cap that falls over time. Changes to the Market Stability Reserve mostly affect carbon supply after 2030 rather than in the short term. Physical CBAM certificates only become available to buy from 2027, which leaves financially settled CBAM swaps as one of the few hedging tools for importers today. EU ETS2, which extends carbon pricing to heating and road transport fuels, has already been delayed by a year, and calls for further delays add to policy uncertainty across carbon markets. 00:00 - Carbon Costs Hit Importers 00:41 - How the EU ETS Cap Works 01:40 - ETS Reform Lands After 2030 03:07 - CBAM Levels the Playing Field 04:14 - CBAM Pricing Goes Weekly 05:08 - Who Pays the CBAM Bill 06:55 - CBAM Hedging Has Few Tools 08:15 - ETS2 Delay Fears Linger Discover Actionable Insights with StoneX Market Intelligence: https://shop.stonex.com/collections/all?utm_source=youtube&utm_medium=social&utm_campaign=sxtv_guest_leah_wieczorek&utm_content=share Like and subscribe for more financial market insights. #CBAM #StoneX #LeahWieczorek #CarbonMarkets --------- Like this video? Subscribe and turn on notifications so you don't miss any videos from StoneX: https://www.youtube.com/@stonex_official Visit https://www.stonex.com/en/insights/thought-leadership/?utm_source=youtube&utm_medium=social for insights, perspectives and thought leadership from StoneX's global network of experts. Visit our website: https://www.stonex.com?utm_source=youtube&utm_medium=social