In early trading on Monday morning, the European carbon market was trading significantly lower, tracking massive losses on the international stock markets, following Trump’s commercial war. Meanwhile, the EUAs are moving away from its traditional link to the gas market.
The European carbon market rallied on Thursday morning reaching briefly €84,50, a level last seen in October 2023. However, the EUAs failed to hold on the gains ending the session at €82,66 almost €2 below the intra-day high.
The price of carbon in the UK ETS has surged an impressive 13% in early trading on Tuesday following an article in the Financial Times. As a result, UKAs closed the day at £40,02, a level last seen in November 2024.
The week opened with a noticeable downward correction on the European carbon market in line with gas and coal markets. At the end of the session, the EUAs closed at €79,36, posting a daily loss of €2,31, the biggest in six weeks.
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.
A new study released by think tank Ember revealed that fossil share in the EU power sector declined from 39% in 2019 to just 29% last year, which is a historic low. In the same interval, renewables have risen from 34% to a record 47%.
The European carbon market traded bearishly on Tuesday morning, reaching an intra-day low of €77,90 only to change direction in the afternoon to close the day at €80,27, the highest settlement since December 2023.
On Monday, after an initial bearish opening to the day, the European carbon market changed direction in the afternoon, tracking similar moves on the gas markets. The EUAs closed the session with a 0.9% daily gain, ending in the green for eight sessions in a row.
The European carbon price traded comfortably above €80 on Friday, before settling at €79.26 by the close, a level last seen in May 2024. Carbon also managed to extend its rally for a seventh consecutive session, posting an impressive 5,6% weekly gain.
The price on the European carbon market could reach an average of €92 this year, according to the Norwegian consultancy firm Veyt. While this latest forecast is €3 lower than the previous one made in October by Veyt, it is more optimistic than projections by other analysts surveyed by Montel News in December.