Emissions and Carbon Trading

Carbon related regimes are continuing to evolve across the globe. Governments and policymakers are revamping regional and domestic carbon trading schemes and deploying wider carbon-based policy measures. Voluntary carbon markets are expanding and expected to grow rapidly in the coming years. The common aim is to price carbon accurately and reduce greenhouse gas emissions, helping to tackle climate change.

These developments present new opportunities for businesses, particularly in respect of their Environmental, Social and Governance (ESG) strategies. At the same time, however, there are numerous challenges to navigate. Market participants need to be aware of different approaches to carbon pricing and markets across jurisdictions, varying expectations for companies in certain sectors, new technologies and governance frameworks influencing markets, as well as carbon price volatility.

Financial institutions and corporates alike must navigate these challenges to participate in and benefit from the carbon markets.

To discuss how we can help, get in touch with our experts.

Allen & Overy experience in emissions trading

Since the earliest days of the carbon markets, Allen & Overy’s multi-jurisdictional carbon and emissions trading practice in Europe, Asia Pacific, Africa and the Americas has expanded to meet client demand.

Pioneers in the carbon markets

We operate at the forefront of the emissions trading field. Our global team is advising on and drafting documentation for, the trading of emissions credits and the development of climate change projects worldwide.

Clients such as ISDA, the Equator Principles Association, RMI (formerly Rocky Mountain Institute) and other trade bodies turn to A&O to help drive their industry shaping sustainability and climate projects.

Strategic and transactional expertise

We have experience working with clients in both the public and private sectors on climate change projects.

This includes advising on the EU ETS, UK ETS, the Kyoto Mechanisms (Clean Development Mechanisms, Joint Implementation and International Emissions Trading), Carbon Border Adjustment Mechanism (CBAM), on both the buy and sell side of Emissions Reductions Purchase Agreements and Project Development Agreements.

A key aspect of our work involves assisting clients on how to best structure carbon-related projects. For instance, in the context of a traditional finance structure or novel carbon funds or bonds. We provide support on the full range of documentation required to bring these projects to fruition.

Forward-looking advice

The utilisation of carbon allowances or credits is a key aspect of our clients’ ESG strategies. Our emissions trading group not only assists our clients in achieving their goals through transactions and climate change projects. We also advise them on how carbon trading fits into their wider sustainability objectives.

Recently, our team has been advising clients on the potential impacts of mandatory greenhouse gas emissions reporting in their annual reports. We are tracking the latest developments in emissions trading regulation and best practice around the world and ensuring our clients stay ahead of the curve.