<- Back
Summary

Does my investment have a climate impact even if I sell my EUAs?

Summary

Holding European Union Allowances (EUAs) longer delays carbon emissions, tightens the EU ETS market to encourage sustainable investments, and allows for selling into a more effective market driving decarbonization, creating a positive climate impact even after the sale and contributing to green finance. This impacts investing in renewable energy and promotes responsible investment.

Return to Blog
Sommaire
Book a call

Your positive climate impact is not erased once you sell your European Union Allowances (EUAs). Actually, keeping them for as long as possible  and then selling isn't just about maximizing financial returns—it is a climate conscious action that improves your impact on reducing carbon emissions.

Delaying carbon emissions

Holding EUAs is equivalent to delaying carbon emissions. When you purchase EUAs, you effectively remove them from the overall carbon budget, preventing installations from accessing those volumes until you decide to sell them. This act of temporarily "confiscating" carbon emissions is impactful—it directly affects the amount of carbon that can be emitted later. By keeping EUAs for a longer period, you contribute to reducing the immediate availability of allowances, which has a tangible effect on emissions temporarity.

Prolonging the EU ETS market tightness

By holding on to your EUAs, you extend the period during which the EU ETS market remains tight. This prolonged market tightness puts additional pressure on industries to seek more sustainable options. Currently, some environmentally friendly technologies are financially viable and technologically possible, but industries may not be sufficiently incentivized to actually adopt them. The longer you keep your EUAs, the longer you maintain the market's fundamental demand-supply  conditions tight, encouraging industries to invest in and implement these sustainable solutions.

Waiting for more price appreciation

EUAs are designed to appreciate in value over time. The longer you hold your allowances, the higher their prices will become. According to the marginal abatement cost curve, higher carbon prices lead to increased adoption of decarbonization technologies. By waiting to resell your EUAs, you not only benefit from higher prices but also contribute to a broader adoption of emission-reducing technologies. You can also time how long you keep your EUAs to align with the adoption of the sustainable technologies as it  becomes economically viable thanks to the higher carbon prices.

Selling in a more effective market

When you eventually sell your EUAs, the market dynamics will have shifted - with increased EU climate ambitions and accelerated supply reduction, the number of available allowances in circulation will have drastically decreased. By this time, industries will have already tackled easier-to-abate emissions, leaving only the most challenging ones. Selling your EUAs in this context ensures that they are used for those last hard-to-abate emissions. 

You now have the power to delay CO2 emission and this has a strong climate impact. On top of contributing to keeping the EU ETS tighter for longer, bringing about a stronger price appreciation, you can be part of a market that brings about material decarbonization changes through technological investments. All of this - even after you sell your carbon allowances. 

Do you like this article?

Share it with your network and introduce Homaio to those interested in impact investing!

The Homing Bird

A newsletter to help you understand the key challenges of climate finance.

Sign up to our newsletter

Utimate guide to carbon markets

Dive into the world of carbon markets, where economics, finance, and environmental science converge. Get your ultimate guide now.

Thank You !
Find our guide with the following link 👉
Download whitepaper
Oops! Something went wrong while submitting the form.
White Paper homaio

Do you like this article?

Share it with your network and introduce Homaio to those interested in impact investing!

Understanding in depth

How can investing in European Union Allowances accelerate emissions reduction ? 
April 22, 2025

How can investing in European Union Allowances accelerate emissions reduction ? 

The EU ETS, a carbon pricing system, reduces emissions and funds the energy transition. Investing in EUAs through platforms like Homaio further accelerates decarbonization by reducing available allowances, driving up prices, and triggering regulatory changes, offering a responsible investing opportunity with potential returns. This promotes ethical investments and responsible savings for a green portfolio.

Decrypting Trump’s impact on Climate - Part 2
April 22, 2025

Decrypting Trump’s impact on Climate - Part 2

Trump's climate action reversal shifts the global landscape, empowering China in green tech and challenging Europe's climate leadership and industrial competitiveness, while emerging markets face financing and policy uncertainty for sustainable investment and responsible investing. This impacts markets, repricing climate risk and creating volatility, requiring European investors to focus on technological sovereignty, socially responsible investments (SRI), green finance and ethical investments.

What is the EU ETS in the shipping industry? Impact for the maritime sector
April 22, 2025

What is the EU ETS in the shipping industry? Impact for the maritime sector

In 2024, the EU ETS expands to include maritime shipping, requiring companies to buy carbon allowances for their emissions, impacting shipping costs but aiming for greener practices and sustainable investment in line with EU climate targets; this responsible investing initiative faces logistical criticisms but is supported by various organizations. This affects how to invest your money in the context of green finance and the carbon market.

Understanding in depth

No items found.

You might also like

How can investing in European Union Allowances accelerate emissions reduction ? 
April 22, 2025

How can investing in European Union Allowances accelerate emissions reduction ? 

The EU ETS, a carbon pricing system, reduces emissions and funds the energy transition. Investing in EUAs through platforms like Homaio further accelerates decarbonization by reducing available allowances, driving up prices, and triggering regulatory changes, offering a responsible investing opportunity with potential returns. This promotes ethical investments and responsible savings for a green portfolio.

Decrypting Trump’s impact on Climate - Part 2
April 22, 2025

Decrypting Trump’s impact on Climate - Part 2

Trump's climate action reversal shifts the global landscape, empowering China in green tech and challenging Europe's climate leadership and industrial competitiveness, while emerging markets face financing and policy uncertainty for sustainable investment and responsible investing. This impacts markets, repricing climate risk and creating volatility, requiring European investors to focus on technological sovereignty, socially responsible investments (SRI), green finance and ethical investments.

What is the EU ETS in the shipping industry? Impact for the maritime sector
April 22, 2025

What is the EU ETS in the shipping industry? Impact for the maritime sector

In 2024, the EU ETS expands to include maritime shipping, requiring companies to buy carbon allowances for their emissions, impacting shipping costs but aiming for greener practices and sustainable investment in line with EU climate targets; this responsible investing initiative faces logistical criticisms but is supported by various organizations. This affects how to invest your money in the context of green finance and the carbon market.

You might also like

No items found.