Carbon market trades within range, falling back with equity markets

By Frank O. Brannvoll, Brannvoll ApS, Denmark

Following the French election the carbon market rose towards EUR71.50 and seemed to be back in the uptrend.

However, the events in the financial markets dragged the prices downwards while at the same time increased short speculation combined with higher auctions from August added downward pressure. In addition, Hungary’s EU leadership did not prioritise the green transition, leading to nervous signals in the market. This resulted in the carbon price again falling below EUR70 and ranging between EUR65-75. To recapture the uptrend the market needs a close above EUR73. Next month’s trading range is seen at EUR66-72.

EUA front-year contract, December 2021-August 2024

Long-term prices for 2030 are unchanged at EUR88. The current December 2024 (Dec24) price fell 1.5 per cent to EUR68.90.

The UK Allowance (UKA) Dec2024 price fell sharply to GBP38.5 (EUR45) and the discount increased to 35 per cent.

Brannvoll ApS maintains the forecast for 2024 to range between EUR55-95 with an average of EUR80 for the Dec24 contract.