Carbon markets tested EUR50 before correcting 20% higher – political uncertainty in EU and US main drivers

By Frank O Brannvoll, Brannvoll ApS, Denmark

The EUA December 2025 contract prices fell briefly to EUR50 levels not seen since the COVID-19 pandemic and sent shivers through many green projects that depend on relatively high carbon prices.
The fear of a European Parliament that after the election would downgrade the green transition to a lower priority, in combination with the US Republican Trump stating that the US would leave the Paris agreement (again) and all subsidies from IRA could be rolled back, has taken a lot of long-term investors out of the carbon market. Furthermore, the lower gas and coal prices are also main drivers in the fall.
Prices for 2030 are now seen at EUR75 instead of the previous range of EUR120-130, again putting pressure on many long-term budgets.

The current price hovers around EUR59 with an expected range of EUR55-65. The UK Allowance December 2024 (UKA) is unchanged at GBP36 (EUR41) and remains stable at 30 per cent discount to the EUA.

Brannvoll ApS lowered the forecasts for 2024 to range of EUR 55-95 with an average of EUR80 for the December 24 contract.