Futures prices for CO2 emission allowances (EUAs, December 2026 contract) have ranged between €74 and €76 per ton since the second half of April.
During this period, the market reacted, among other things, to political statements, and prices often moved in the opposite direction of energy price fluctuations. For example, on April 17, EUAs ended the trading week with a significant increase—to €77.5/t (+6.7% from the start of the week, April 13)—amid prospects for peace talks in the Middle East and news that Iran plans to reopen the Strait of Hormuz to all traffic. Following the latest announcement, oil prices fell sharply, as did European gas prices. However, this level of EUA prices was not sustained in the days that followed.
Not only European but also British carbon prices have been rising. On April 16, the United Kingdom announced the abolition of the Carbon Price Support (CPS) mechanism, effective April 2028. This tax was introduced in 2013 and was levied in addition to the CO2 price paid by power plants under the ETS, in order to make electricity generation from fossil fuels more expensive. In last year’s budget, the government froze this levy at £18/t CO2 until April 2028. The complete phase-out of coal-fired generation renders this tax obsolete.
At the start of this week (April 20–22), European carbon prices fell for three consecutive days. Trading was subdued as the market adopted a wait-and-see stance regarding further news on the war with Iran.
As a reminder, in early April, futures prices for CO2 emission allowances (December 2026 contract) remained above €70/t. On April 1, according to ICE, European carbon prices rose to a seven-week high of €74.6/t following the European Commission’s announcement of the first concrete measure regarding the transformation of the EU ETS: the adaptation of the Market Stability Reserve (MSR).
Courtesy : https://gmk.center/en
