According to ABN AMRO, the third-largest bank in the Netherlands, the bullish sentiment that is currently dominating the carbon market is “mainly driven by the rising uncertainty in the European gas market along with the geopolitical ambiguity surrounding US trade policies.”

Furthermore, ABN AMRO notes that “the current levels are largely driven by speculation by market participants in the gas market rather than fundamentals in the carbon market.”  In a separate report on the gas market, the bank suggests that “current month-ahead levels are being inflated by speculation.”

The recent strong increase in carbon prices has prompted ABN AMRO to raise its forecasts for the first quarter of 2025 from €70, predicted in December, to €75. However, the bank maintained its estimates for the rest of 2025, expecting an average of €65 in the second quarter, before EUA prices regaining strength by the end of the year.

Carbon prices will continue to remain sensitive to weather conditions and any events regarding the gas markets which in turn, remains responsive to uncertainty regarding gas supplies and geopolitical ambiguity. “For example, a peace deal ending the war in Ukraine would deliver a relief to the gas market and induce an abrupt decrease in prices.” 

Another uncertainty currently hanging over the EU energy-related markets is the extent and level of the new US tariffs which will have a negative impact on the economic growth.  “This is expected to slow down the recovery in industrial demand in the second half of 2025” warns the bank.