On 22 July, the price of emissions allowances jumped to a six-month high
European carbon prices in early August remain above €80/t following a surge to a six-month high on 22 July.
Following the publication on 17 July of the European Commission’s proposals for reforming the Emissions Trading Scheme (EU ETS), carbon prices rose in the days that followed. On 22 July, trading in the benchmark contract for December 2026 closed at a six-month high of €86.6/t (the highest level since January this year).
During this period, Carbon Pulse notes, the market increasingly factored into prices the impact of the European Commission’s proposals, which will lead to a structural deficit over the next few years. However, prices subsequently corrected. In particular, by 23 July they had fallen to €83.8/t. The initial surge in speculative buying at the start of the week, the portal notes, does not appear to have triggered broader demand. At the same time, traders feared that a significant breach of the €80 mark could provoke further complaints from EU countries and industrial firms.
At the same time, analysts surveyed by Reuters have lowered their forecasts for European carbon prices for 2026 and 2027 in light of the emissions trading scheme reform proposed by the European Commission.
According to a survey of nine experts, the average price of EU emissions allowances is forecast to be €79.97/t in 2026 and €89.13/t in 2027. These figures are lower than the April forecasts of €80.61/t and €93.29/t respectively.
As Rystad analyst Noemi Zürcher noted, the main reason for the downward revision of the forecasts was the proposed change to the annual rate of reduction in the number of allowances under the ETS.
It is worth recalling that in mid-July, European carbon prices continued to exceed €80/t against a backdrop of growing speculative long positions ahead of the presentation of the ETS reform package. This development overshadowed other signals, notably the further escalation of the conflict in the Middle East and rising electricity prices in the region.
