Carbon prices in Europe fall in February amid calls for ETS review

European carbon prices (EUA, December 2026 contract) fell in February 2026 amid numerous comments on the ETS review.

While in January they exceeded €90/t, according to ICE data, in February they fell below €70/t (€69.2/t on February 16).

In general, the market has been falling since the beginning of the month, shifting from reacting to energy factors, in particular the price of natural gas, to geopolitical (the situation in the Middle East) and European political factors, which, in particular, is provoking waves of long positions being closed by investment funds.

On February 12, the day after German Chancellor Friedrich Merz announced at an industrial forum in Antwerp that the European emissions trading system could be «revised or postponed,» EUA prices fell from €78/t to €72.5/t, and by the end of the trading week to €70.7/t. Many market participants, Carbon Pulse noted, reported that the political comments did not add certainty to either the short-term or long-term prospects of the ETS. However, later, after a meeting of EU leaders in Belgium, Merz effectively retracted his previous statement, noting that the emissions trading system is a good tool. It was also defended by French President Emmanuel Macron.

Earlier, on February 10, Member of the European Parliament Peter Liese told reporters that changes to the EU ETS as part of its upcoming review (details of the reform are to be announced in the third quarter) may include slowing down the pace of phasing out free allowances for industry from 2029.

In addition, Czech Prime Minister Andrej Babiš called for a review of the ETS to reduce energy prices. In his article on EU environmental policy, Antonio Gozzi, president of the Italian steel producers’ association Federacciai, proposed restoring access to the ETS market only to industrial operators and utilities, excluding financial intermediaries who have turned carbon allowances into instruments of speculation.

It should be recalled that in January of this year, the main factors driving up carbon prices in Europe were speculative market dynamics, a gradual reduction in the supply of greenhouse gas quotas, and the final implementation of the Carbon Border Adjustment Mechanism (CBAM).