Participants in the Eurozone commodity sector face a challenging paradox: while environmental regulations compel them to account for carbon costs, existing risk management tools force them to hedge commodity and carbon price exposures separately.

This leads to over-hedging, strategy misalignment, and financial inefficiencies, leaving companies exposed to hidden risks or costly overpayments.

Treasury and trading desks are caught between uncertainty and inefficiency, with no seamless way to synchronize the two volatile exposures in real operations.

The core barrier is the structural separation of commodity derivatives and carbon markets, both in financial product design and platform connectivity.

Regulatory uncertainty and a lack of standardization prevent the creation of hybrid hedging instruments that can be widely adopted by market participants.

Risk managers currently use separate commodity and carbon derivative products—often with limited liquidity and poor correlation—leading to suboptimal hedging, administrative complexity, and exposure mismatches.

Structured products are rare, costly, and lack transparency for broad adoption.