The rise in prices on the European greenhouse gas emissions market is being closely monitored in industries participating in the ETS (Emissions Trading System). Emission unit prices are currently between 50 and 60 euros, while last year they were 20 euros. At the same time, the pressure is increasing around free emission quotas, which, according to the proposal of the new legislative framework, could be depleted faster than expected. Manufacturers whose quotas do not cover their actual needs must prepare well, as the record rise in CO2 prices poses an increasing risk to their business.
– Quotas are assigned to each manufacturer according to the rules of the EU ETS system based on historical data on the quantities of products produced. Given the amount of cement we produce, those quotas are insufficient, meaning we have to purchase a certain portion at auction – confirms Julija Škoro, Head of Communications and Marketing at Holcim Croatia.
Although it is still unknown how much the free quotas they currently hold will be reduced, that pace could reach ten percent annually from 2025 to 2035 if the EU proposal recently went out for public consultation is accepted.
One way to strengthen resilience against quota reductions and price increases is a long-term approach to acquiring emission permits. For example, this manufacturer of concrete, cement, and aggregates purchases CO2 emission rights for a longer period by having the Holcim Group handle the purchase for all EU countries, including Croatia.
– The Holcim Group has committed not to speculate in a way that profits from the difference in carbon prices. That is why it has been determined that the missing units are purchased for a longer period – explains Škoro.
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However, alongside careful procurement of permits, activities to reduce carbon footprints are also necessary, which Holcim has been working on for over twenty years.
– Through such investments, we have so far reduced CO2 emissions per ton of cement by 26 percent compared to 1990. Additionally, we actively advocate for changes in construction legislation that would enable the application of low-carbon products, and we also support the establishment of mechanisms that would direct the market towards demand for such products. The issue of CO2 is a societal issue, and no manufacturer can become truly resilient on their own. The sooner we understand the interdependence of all segments of society, the sooner we will be able to agree on joint actions towards decarbonization – believes Holcim’s Head of Communications and Marketing.
As a leading global manufacturer of building materials, her company supports the decarbonization of Europe. That actions are being taken, not just words, is supported by the fact that Holcim is the first building materials manufacturer in the world to not only sign the UN’s action for alignment with 1.5 °C but also verify its plan by 2030. Additionally, Holcim is currently working with the Science Based Target Initiatives organization on an action plan for decarbonization, the first such plan in the building materials industry.
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