CEO Brief

Corporate Decarbonisation and the Cost of Carbon - A Missing Link.

Executive Headline

Carbon costs are already in your cost base - embedded in electricity tariffs, supply chain pricing, and compliance obligations. Most companies have not quantified this exposure. As EUA prices move from €80 today toward projected levels of €145 by 2030 and €200 by 2035, that gap between visibility and reality will become a strategy problem.

€5 - €80

EUA price per tCO2, July 2016 to June 2026

~€145

ABN AMRO baseline EUA projection, 2030 (per tCO2)

~€200

ABN AMRO baseline EUA projection, 2035 (per tCO2)

Layers of carbon-cost exposure covered in this analysis

2024

Denmark's Green Tripartite Agreement extends pricing to agriculture

The Shift - What Is Changing

The price of carbon is not a future policy question. It is a present cost that most companies carry without knowing exactly how much. EU ETS allowances are embedded in electricity tariffs. National carbon taxes flow through supply chains under polluter pays. Countries with weaker climate ambition are not lower-pressure environments - they are deferred-pressure environments. The direction of travel is consistent: delayed action means a sharper adjustment later, not a smaller one.

Why It Matters - Business Impact

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Already in your electricity bill

Power generators fold EU ETS allowance costs into electricity tariffs. Companies buying electricity are exposed to carbon pricing whether or not they are formally in scope - and the exposure grows as EUA prices rise toward the 2030 and 2035 projections.

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Flows through supply chains

National carbon taxes - covering transport, heating, small industry, and in Denmark now agriculture - reach sectors beyond the EU ETS. Under polluter pays, direct emitters pass costs downstream. Customers absorb carbon costs they cannot see and have not modelled.

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Weak ambition is deferred pressure

Countries with weaker Climate Action Tracker ratings look like lower-pressure environments. In practice, Paris commitments, investor expectations, CBAM, and supply chain requirements mean catch-up pressure tends to arrive later but harder - not to be avoided.

Business Exposure

Type	Exposure
Risk	Companies that have not quantified their indirect EU ETS exposure through electricity and supply chain pricing cannot model the true cost trajectory of their current operations - or the capex required to reduce it.
Risk	Firms sourcing from or operating in markets with weaker current climate ambition carry deferred catch-up risk. CBAM, investor screening, and supply chain requirements are already beginning to close that gap regardless of local policy pace.
Opportunity	Companies that embed forward carbon price scenarios into capital allocation decisions now - as Maersk has done with its USD 75/t shadow carbon price - will make structurally better investment decisions over the next decade than those treating carbon as a compliance line item.
Opportunity	Quantifying carbon cost exposure creates the internal business case for decarbonisation investments that purely environmental arguments often cannot - connecting sustainability to CFO language and investment committee criteria.

Leadership Lens

›What share of our current electricity and supply chain costs is attributable to carbon pricing - and do we have that number?
›Have we mapped national carbon tax exposure across every jurisdiction in our operating footprint and supply chain?
›Are forward EUA price scenarios - anchored to independent projections - embedded in our capital allocation and pricing models?
›Which of our key sourcing and operating markets carry the highest CBAM and catch-up risk under weaker current ambition?

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Key Takeaway

The future cost of carbon belongs in strategy and capital allocation - not just in the sustainability report. Companies that price it in now will make better investment decisions than those that wait for the number to become unavoidable.

↑ Back to summary

Section 1 Implication

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Carbon cost is already in your electricity bill

Companies that buy electricity are indirectly exposed to EU ETS allowance prices, because power generators fold carbon costs into their tariffs. That exposure is rarely broken out as a separate line item, which keeps it largely invisible on corporate balance sheets even as it drives the total cost.
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Polluter pays flows downstream

National carbon taxes reach further than the EU ETS - into transport, heating, small industry, households, and in some countries agriculture. Under polluter pays, direct emitters pass these costs through supply chains, so customers and downstream users absorb them too, whether or not they are formally in scope.
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Weak national ambition is not low pressure, it is deferred pressure

Countries with weaker Climate Action Tracker ratings can look like they create less pressure on business. In an interconnected economy shaped by Paris commitments, investor expectations, and border measures such as CBAM, that gap tends to close through a sharper, later adjustment rather than no adjustment at all.

Section 2 Insight - Three Layers of Exposure

The Kyoto Protocol took a primarily government-led approach to climate policy. The Paris Agreement recognised that corporations needed to be part of the climate conversation. Today, climate and carbon regulation increasingly target corporations directly. Yet one major blind spot remains: the price of carbon, and what it means for businesses over the medium and long term.

1. EU ETS allowances and electricity costs

Companies buying electricity are indirectly exposed to the cost of EU Emissions Trading System allowances, because power generators factor carbon costs into electricity prices. That exposure is often embedded in the tariff rather than shown as a separate line item, which makes it less visible on corporate balance sheets.

As the EU reduces the supply of allowances over time, carbon costs are expected to remain under upward pressure. In July 2016, EUA prices were around €5 per tonne of CO2; by June 2026, they were around €80. Independent ABN AMRO analysis projects prices of about €145/tCO2 by 2030 and €200/tCO2 by 2035 in its baseline scenario, driven mainly by lower allowance supply. By 2040, the cap will need to keep tightening in line with the EU's net-zero 2050 trajectory.

EU ETS Carbon Price - Historical & Projected

2. Carbon taxes and national carbon pricing

The EU ETS applies to large emitters in power and heat generation, energy-intensive industry, aviation, and maritime transport. Outside the EU ETS, national governments increasingly use carbon taxes or other carbon pricing instruments for sectors such as transport, heating, small industry, households, and in some countries agriculture.

In Sweden, carbon pricing has long been among the highest globally, combining carbon taxes with the EU ETS. Denmark's 2024 Green Tripartite Agreement expanded carbon pricing to agriculture, including livestock emissions. Under polluter pays, carbon costs often flow through supply chains - a transport company serving business customers is likely to reflect carbon costs in its pricing.

3. Climate ambition and transition pressure

Climate Action Tracker provides a useful view of the gap between current policy and long-term decarbonisation targets. Countries with weaker ratings may appear to create less pressure on business - but every country is still constrained by Paris Agreement commitments, investor expectations, supply chain requirements, CBAM, and global competitiveness pressures.

Countries with weaker ambition are likely to face stronger catch-up pressure over time. Delayed action does not reduce the need for decarbonisation - it usually makes the adjustment sharper later.

Section 3 Foresight - What Changes

Now	Carbon costs are already embedded in electricity tariffs, compliance obligations, and national tax systems. Most of this exposure sits inside cost lines companies already pay, rather than as a separate, visible charge.
12 months	EUA prices continue on an upward trajectory as allowance supply tightens. National carbon pricing regimes, such as Denmark's extension into agriculture, keep widening sector coverage. CBAM implementation adds further pressure on companies with carbon-intensive imports.
3 to 5 years	ABN AMRO's baseline scenario points to roughly €145/tCO2 by 2030, with the EU cap continuing to tighten toward the 2050 net-zero trajectory through 2040. Companies with weaker current exposure, including those in countries with lower climate ambition, face a steeper catch-up curve as border measures and investor expectations converge.

Section 4 Inaction - Consequences

Companies that treat carbon pricing as a compliance line item rather than a strategic cost risk mispricing capital allocation decisions that will play out over years, not quarters. Because EUA and carbon-tax costs are largely embedded in energy tariffs and supply chain pricing rather than itemised separately, they are easy to overlook until they compound. Firms operating in markets with weaker current climate ambition are particularly exposed, since catch-up pressure - through tightening policy, rising carbon prices, and border adjustments - tends to arrive later but harder.

Section 5 Action - What Good Looks Like

Level	Observable behaviour
Basic	Company is aware of EU ETS pricing trends and tracks the headline EUA price, but has not quantified how much of its electricity cost or supply chain pricing is attributable to carbon. Carbon cost is treated as a macro backdrop, not a line item.
Intermediate	Company has estimated its indirect EU ETS exposure through electricity tariffs and mapped which national carbon taxes apply across its operating footprint and supply chain. Medium-term EUA price scenarios, such as the ABN AMRO 2030/2035 baseline, are referenced in planning discussions.
Advanced	Forward carbon price scenarios are embedded in capital allocation, procurement, and pricing decisions. The company tracks Climate Action Tracker ratings and CBAM exposure across the markets it operates and sources in, and treats weaker-ambition jurisdictions as future catch-up risk rather than lower priority.

Section 6 Next Steps

Horizon	Action	Owner
Now	Quantify the share of current electricity and supply chain costs attributable to EU ETS allowance pricing and applicable national carbon taxes, even where these are not broken out as a separate line item today.	Finance and Sustainability
Now	Map carbon tax exposure across every jurisdiction in your operating footprint and supply chain, including sectors outside the EU ETS such as transport, heating, and agriculture.	Sustainability and Procurement
Within 1 year	Build forward EUA price scenarios, anchored to independent projections such as ABN AMRO's 2030 and 2035 baselines, into medium-term capital allocation and pricing models.	CFO and Strategy
Within 1 year	Cross-reference Climate Action Tracker ratings and CBAM exposure for key sourcing and operating markets, and flag weaker-ambition jurisdictions as catch-up risk rather than lower priority.	Sustainability and Risk
Post 1 year	Embed the future cost of carbon into standard strategic planning and capital allocation cycles, alongside energy price and FX assumptions - not as a one-off exercise but as a running input reviewed as policy and pricing evolve.	CFO and CSO