Several analysts have rushed to cut their previous estimates on carbon prices for 2024 as they seem less optimistic after the recent steep decline which, according to Montel News “has caught observers by surprise.”

The Swedish bank SEB expects carbon prices to drop as low as €45 this year,  as declining gas demand and higher-than-normal inventories will continue to weigh on gas prices as well as on carbon allowances.

S&P Global also decided to slash its forecast. Earlier in February, the company predicted that the average price for EUAs this year would stand at €63,9, a massive decline from previous forecasts published in November (€93,50) and December (€89,60).

In a report published yesterday, “5 charts to watch this week,” analysts at S&P Global reiterated their bearish opinion on carbon prices: “Europe’s compliance carbon market is facing bearish, with reduced power plants emissions forecast, soft gas prices and the EU’s front-loading program to bring forward some allowance auction volumes to 2023-2026 from 2027-2030.”

However, S&P Global analysts expect average carbon prices to recover to €82 next year, as the shipping companies recently included in the EU ETS would have to surrender their allowances by 30 September 2025 for emissions reported in 2024.