Carbon Emission Allowance Administrative Diagram

Strengths

• Trust architecture provides asset isolation with strong compliance
• Can integrate with the national carbon market system with high trading execution efficiency

Weaknesses

• High price volatility of carbon allowances makes product net value management challenging
• Enterprise clients lack awareness of carbon financial instruments, resulting in high market education costs

Opportunities

• Expansion of the national carbon market and the approach of cross-border carbon trading bring incremental demand
• Export enterprises need financial hedging tools to cope with the EU Carbon Border Adjustment Mechanism

Threats

• Changes in carbon allowance allocation policies lead to unstable underlying asset value
• Banks and other institutions launching similar carbon custody products create competition