Carbon allowances: Trajectories and costs for mid-size companies - Newsletter no. 8

The carbon quota system in place since 2005 is set to undergo major changes over the next few years (drastic reduction in the emissions cap and the abolition of free quotas by 2034), which will have a major impact on the carbon costs borne by sites subject to the system. In this letter, we estimate the changes in costs that mid-size companies will have to cope with. The main results can be summarized as follows: 1. Since 2013, mid-size companies and big companies have benefited from comparable rates of free allocations. 2 - Between 2013 and 2021, mid-size companies have purchased around 20% of French paid allowances. 3 - In the most pessimistic scenario (low emissions reduction and high allowance price), the total carbon cost of mid-size companies, estimated at 277 million euros in 2021, could reach 3,066 million euros in 2034, i.e. 11 times higher