The EU Carbon market prices - historical and future outlook
The EU carbon market The EU carbon market consists of carbon allowances that energy-intensive sectors need to buy to compensate for their greenhouse gas (GHG) emissions. This market is known as The EU Emissions Trading System (EU ETS). Currently, the economic actors mandatory for participating in this trading system are the power, industry, aviation, and from 2024 the maritime sectors. One European Emission Allowance (EUA) gives the holder the right to emit 1 tonne of CO 2 and is quoted in EUR, effectively putting a price on the emission of 1 tonne of CO 2 . Historical prices - timeline The graph shows the historical prices of an EUA since its launch in 2005. Uncertainties and a generous free allocation of allowances led to a slow start with prices hovering around 5-25 EUR/t. A trading collapse in 2006 saw prices drop to near zero due to excess allowances. The prices then stabilized below 20 EUR/t, before a gradual incline began in 2018. Significant market reforms int...