Exclusive European carbon prices remain above €70/t in April

The market continues to react to the war with Iran and the steps being taken to reform the ETS

During the first week of April, futures prices for CO2 emission allowances (December 2026 contract) remained above €70/t.

On April 1, according to ICE, European carbon prices rose to a seven-week high of €74.6/t following the European Commission’s announcement of the first concrete measure regarding the transformation of the EU ETS—the adaptation of the Market Stability Reserve (MSR). The European Commission proposed only minimal and measured changes, which alleviated fears of aggressive intervention; the market did not see an immediate negative impact on permit prices.

Regarding the EC’s proposal, under the current system, all permits in the MSR exceeding 400 million are canceled. The proposed amendment would halt the cancellation mechanism, allowing these allowances to be retained as a buffer that can support market stability.

Following the Easter holidays in Europe, trading in carbon emission allowances resumed at a calm level, with the price on April 6–7 standing at €71.6–71.7/t. The market was awaiting developments regarding the conflict in the Middle East, and traders were also looking for updated benchmarks for the free allocation of allowances in the EU ETS (the EC intended to publish them shortly after the holidays).

On April 7, the European Commission officially set the base price for CBAM allowances for the first quarter of 2026 at €75.36 per ton of CO2. In 2026, it will be calculated as the average quarterly price of allowances sold at EU ETS auctions. This announcement is the first clear indicator of the mechanism’s actual cost for importers. Earlier, at the beginning of the month, the European Exchange published its first quarterly reference price for CBAM certificates at the same level.

As a reminder, in March, the cost of carbon emission allowances was determined by both the energy market situation and political statements. However, the market reacted most strongly to the EU leaders’ summit, as the future of the emissions trading system was discussed there, among other things.