The price of carbon in the EU in 2026 will be €92.6/t – analysts

Analysts have slightly raised their forecasts for prices on the EU carbon market for the next couple of years, Reuters reports.

According to the expectations of 10 experts surveyed by the agency, the average price of carbon emission allowances (EUA) will be €92.65/t in 2026 and €107.29/t in 2027. In October, they predicted €91.11 and €106.94, respectively.

Analysts also predict volatility in trading this year, as the cost of the underlying contract will fluctuate depending on gas prices in Europe.

As Noemi Zurcher, senior analyst for carbon markets and policy at Rystad, noted, in the short term, CO2 prices in the EU will continue to correlate with gas prices. However, as new industrial players gradually move away from free allowances, demand will gradually shift towards industrial needs and prices, depending on the cost of decarbonisation technologies.

Hege Fjellheim, head of carbon analysis at Veyt, says they expect European carbon prices to rise sharply over the coming years (from 2027) due to tighter annual market balances.

The average EUA price forecast for 2028 was €110.9/t, little changed from the October forecast of €110.2/t.

It should be noted that European carbon prices exceeded €90/t in January. The main factors driving the increase are speculative market dynamics and a gradual reduction in supply. According to the ICE exchange, the price was €92/t on January 15-16, which is more than a two-year high.