Carbon pricing has become a defining feature of industrial competitiveness. No longer a background policy lever, it now directly shapes investment decisions, supply chain resilience, and cross-border trade. For carbon-intensive sectors, understanding carbon is no longer optional—it is a strategic imperative.
This io Explainer cuts through complexity to demystify the EU and UK Emissions Trading Systems (ETS) and the upcoming Carbon Border Adjustment Mechanisms (CBAM). These instruments are reshaping how—and where—industry decarbonises, from steel and cement to aluminium, hydrogen, and fertilisers.
In this explainer, we cover:
- ETS market mechanics: from allocation and trading, to cost exposure and cap tightening.
- CBAM design: how the EU and UK are levelling the playing field by applying domestic carbon costs to imports.
- Sectoral exposure: what the changes mean in practice for industries facing price gaps and emissions intensity scrutiny.
- Global convergence: why alignment between ETS and CBAM is fast becoming a benchmark for climate-economy policy.
At io consulting, we help clients navigate this shifting landscape with clarity and confidence. Our FEL-led approach connects emissions policy, cost signals, and investment frameworks—translating them into practical pathways for project development, portfolio resilience, and transition leadership.
Carbon is now a commercial variable. Those who understand its signals early and respond with disciplined action will lead the low-carbon transition.
