According to a report published by ING last week, the European carbon prices are expected to average €75 this year. In an article released last December, ING predicted an average price of €74 for 2025. 

The bank revised higher its outlook for the first quarter from €70 predicted a month ago to €75 as “the EUAs have started 2025 on a strong footing with prices hitting their highest level since January 2024.” For the reminder of the year, the predictions were unchanged.

Among the reasons cited in the document for the upward trend so far this year are: higher fossil fuel power generation amid stronger heating demand as well as the speculators behavior. “Speculators, who were bearish on EUAs for much of 2024, are now holding their largest net long positions since August 2022,” warns ING.

The bank expects carbon prices to average €75 by the end of the year, significantly higher than the average of €67 reached in 2024. The EUAs will be supported by increased coverage of emissions in the shipping sector,  the decrease of 50% in free allocations for the aviation sector and anticipation of phasing out free allocation for the sectors covered by the CBAM in 2026.