From 2026, four European regulatory pillars shall shape the energy transition with significant effects in the corporate world: I ETS (Emissions Exchaization System), CBAM (Carbon Tax), EUDR (Deforestation Regulation) and CSRD (Directive on Sustainability Reports). If the latter involves mainly administrative charges, the first three will have direct impacts on profitability and investments that are already starting next year. But what amount are we talking about? Dealing with sustainability is a study by Giuseppe Amitrano (ex UBS, RBS and Scotia Bank) and Antonio Guglielmi (Ex Merrill Lynch and Mediobanca), partner of Boutique Financial Wieldmore, published exclusively at Adnkronos Eurofocus.
The most affected sectors will be steel, energy, agriculture, buildings and logistics. The main subjects such as aluminum, steel, fertilizers, coffee and soy will become increasingly expensive, also due to new environmental rules. More than 30% of European GDP will be affected by the transition, with estimated impacts of up to 25% of accumulated profits for the most exposed Italian companies in the next five years, reads the report.
Five main risk factors:
ETs: Free actions will be reduced, making emissions a direct cost.
CBAM: The import costs of high intensity carbon goods will increase.
EUDR: It will impose new restrictions on agricultural matters related to deforestation.
Financing: Credit will become more selective and expensive.
Physical Risk: Extreme and heat waves will put productivity at risk.
Italian companies will have to act on various fronts: improve the traceability of materials, adopt financial coverage strategies, strengthen the supply chain, explore alternative financing tools, and plan investments in structural energy. Management of physical risk with advanced geospatial analysis tools will also be fundamental.
The banking system is also under pressure: exhibitions for the most vulnerable sectors and the absence of a light regulatory structure increases risks. Studies indicate a potential increase in default probability of 40% in three years for German banks. More rigorous regulatory metrics are coming (for example, Var Carbon, Climate Beta) that may limit the ability to support the economy by bank credit.
In short, the energy transition represents an epocal change that, if approached today with transparency and forecast, can mitigate future systemic shocks and strengthen the economic and financial resilience of Europe.
Source: IL Tempo
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
