According to Carbon Pulse, during Thursday’s closed doors meeting of EU environment ministers, France “added a last-minute item to the agenda,” calling for the introduction of a price corridor, with a minimum and a maximum level, to help stabilize the market.

French climate minister Agnès Pannier-Runacher said after the meeting that “We must act swiftly to improve price predictability and the visibility offered to players,” adding that  “an ETS price corridor, defined in line with the EU’s emissions reduction target” is needed, without giving further details.  

According to Reuters, quoting officials familiar with the matter, some other countries, including the Czech Republic, already support the idea. In the past, politicians have tended to complain about carbon prices being too low or too high.

In 2016, when carbon was trading below €5, the French government promoted the idea of a carbon price corridor, hoping to push prices above €20. However, the situation soon changed and in 2021, when EUAS were trading around €80, Poland urged the European Union “to do more to curb volatile prices in the EU carbon market, which it said are driven by financial speculators and have burdened businesses,” as reported by Reuters at that time. 

However, the idea of having a price corridor has been embraced by other emissions trading systems. The California Cap&Trade program includes a price control mechanism with both a price floor and a price ceiling “to stabilize and limit the costs passed through to consumers”. In the national ETS in Germany for the buildings and transport, starting in 2026, the allowances will be auctioned in a price corridor of €55-€65.

The market reacted with falling prices to the news, EUAs dropping to their lowest in two weeks and closing the day at €68,08 with a daily decline of 3,23%.