The European Union
Emissions Trading System (EU ETS) is a key component of Europe’s climate change
mitigation policy. This thesis explores the financial implications of the EU
ETS on four prominent Icelandic businesses in the aviation and maritime
industries: Icelandair, Air Atlanta, Eimskip, and Samskip. As the EU ETS is continuously
updated and the European Union and works to improve its policy for the
betterment of emissions mitigation, these sectors face increasing operational
costs related to greenhouse gas emissions. By analyzing the direct costs of buying
allowances under the EU ETS, this research delivers insights into the economic
burden posed on these companies. Through a sector cost analysis, this study
provides an evaluation of the compliance costs for each company based on the
quantity of emissions and freely allocated emissions allowances. The thesis then
highlights a calendar effect analysis that uncovers emissions price patterns at
auction, revealing strategic times for the purchase of allowances and guiding
strategic cost management. Furthermore, this research employs an optimal
stopping model for the purchasing of emissions allowances. This model aids
companies in minimizing expenses while mitigating regulatory risks associated
with excess emissions. It serves as a vital decision-making tool under volatile
market conditions.
“Christodoulou, A., Dalaklis, D., Ölçer, A. I., & Ghaforian Masodzadeh, P. (2021). Inclusion of Shipping in the EU-ETS: Assessing the Direct Costs for the Maritime Sector Using the MRV Data. Energies, 14(13). https://doi.org/10.3390/en14133915 “
“Liu, Y., Sun, H., Meng, B., Jin, S., & Chen, B. (2023). How to purchase carbon emission right optimally for energy-consuming enterprises? Analysis based on optimal stopping model. Energy Economics, 124. https://doi.org/10.1016/j.eneco.2023.106758 “
“Calendar Anomalies in Developed EU Stock Markets
Andreas G. Georgantopoulos*# & Anastasios D. Tsamis**”