The increasing concerns over the global growth outlook amid geopolitical tensions and uncertainty around US trade policies have prompted ABN AMRO,  the third-largest bank in the Netherlands, to revise slightly downwards its outlook for carbon prices for the second half of this year.

In light of the current global context, EU Allowance prices are now expected to average €70 in the third quarter and €73 in the fourth quarter of this year—representing downward revisions of €3 and €5, respectively, from previous forecasts.

However, the bank has kept its second-quarter forecast unchanged, maintaining an average carbon price of €67—consistent with its previous projection published in March. Additionally, ABN AMRO notes that, based on current conditions, carbon prices are expected to hover around €66 per tonne of CO2 in May.

The report also anticipates a rebound in September, ahead of the surrender deadline which “will be tempered by the anticipated global economic slowdown, which is likely to dampen demand from the industrial and power generation sectors.”

Given the chaotic tariff policies that have recently  generated a massive surge in market volatility, the bank also warns of possible EU carbon market interventions, like those after the energy crisis, including front-loading allowances for REPowerEU. Furthermore, carbon prices will continue to remain sensitive to weather conditions and to any events regarding the gas markets, warns the bank.