Company: DEFI
Filing Date: 2025-03-17
Form Type: S-1/A
Source: 0001387131-25-000058
Chunk: 114

Company: Tidal Commodities Trust I
Filing Date: 2025-03-17
Form: S-1/A
Chunk 114
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The EU ETS began with a first Phase running from 2005 to 2007. Phase II of the mechanism is in line with the first Kyoto period and ran from 2008-2012. Phase III ran between 2013 to 2020. Phase IV commenced in 2021 and will run until 2030. Allocations in Phase II were reduced from their respective levels in Phase I to ensure that they were consistent with meeting national Kyoto targets. In Phase III, while some participants were still allocated free allowances, auctioning is the default method for allocating allowances. In addition, EU legislation enables banking of credits between Phases (e.g., from Phase II to Phase III, although this was not possible between Phase I and Phase II).

In 2023, the EU adopted and implemented important reforms of the EU ETS framework as part of: the “Fit for 55” package, to align the system with the EU’s 2030 climate target of at least 55% net emissions reductions compared to 1990 levels and the European Green Deal objectives, the EU’s response to the energy crisis caused by Russia’s invasion of Ukraine (“REPowerEU” plan).

EUA pricing is set by supply and demand. Supply is determined by EUAs and other carbon credits (CERs, EUAs) which are available to the market. Demand is determined by the volume of carbon emitted during the year in relation to the annual allocation. The main factors influencing volumes emitted in the short-term are the weather, relative fuel prices, general economic activity and the amount of electricity generated from non-fossil fuel sources. The bulk of exchange trading activity in EUAs is concentrated on the ICE Endex Energy exchange (“ICE”).

| ● | CCA:                                                                                           
 The CCA cap-and-trade regime is designed to reduce greenhouse gas (“GHG”)                      
 emissions from major sources (covered entities) by setting a firm cap on statewide GHG         
 emissions while employing market mechanisms to cost-effectively achieve the emission-reduction 
 goals. The statewide cap for GHG emissions from major sources, which is measured in metric     
 tons of carbon dioxide equivalent (MTCO2e), commenced in 2013 and has declined over time,      
 achieving GHG emission reductions throughout the program’s duration. Each covered              
 entity will be required to surrender one permit to emit (the majority of which will be         
 allowances, entities are also allowed to use a limited number of ARB offset credits)