Below you’ll find a clear explanation of the environmental certificates available on Viridian and how they function within the EU and UK compliance markets.
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The European Union Emissions Trading System (EU ETS) is the EU's flagship policy for combating climate change by placing a price on carbon. It is a mandatory and legally binding Compliance Market that aims to reduce greenhouse gas (GHG) emissions from large industrial installations, power generators, and, more recently, the aviation and maritime sectors.
The EUA Spot Market is a key part of the secondary market where EUA’s are traded. The spot market is where assets are bought or sold for immediate settlement, or "on the spot," at the prevailing market price.
In simple terms, if a company realizes it needs an immediate supply of EUA’s to cover its verified emissions, it will turn to the EUA spot market to buy the required allowances at the live market price. The spot price, therefore, reflects the current supply and demand dynamics for physical allowances.
The UK Emissions Trading Scheme (UK ETS) is the cornerstone of the UK's climate policy, established to replace the UK's participation in the EU ETS from 2021. It is a mandatory and legally binding Compliance Market that aims to reduce greenhouse gas (GHG) emissions from large industrial installations, the power generation sector, and aviation, with plans to expand its scope further.
The UKA Spot Market is a key part of the secondary market where UKA’s are traded. A spot market is where assets are bought or sold for immediate settlement, or "on the spot," at the prevailing market price.
In simple terms, if a company realizes it needs UKA’s to cover its verified emissions, it will turn to the UKA spot market to buy the required allowances at the live market price. The spot price, therefore, reflects the current supply and demand dynamics for physical allowances.
The ETS2 is a major expansion of the EU's climate policy, establishing a new, separate cap-and-trade system to address sectors that were previously outside the original EU ETS scope.
ETS2 operates on the same core ETS1 Cap and Trade principle but targets different players in the economy. The system covers CO2 emissions from fuel combustion in buildings, road transport, and additional small industrial sectors.
The ETS2 is establishing a compliance market entirely separate from the original EU ETS (ETS1), requiring its own distinct allowances and trading system. The ETS2 Spot Market is where the physical ETS2 allowances are bought or sold "on the spot" at. We will offer the same high level of service for ETS2 as we do for ETS1. This includes providing DMA (Direct Market Access) and all advantages accordingly.
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