CO2, in recent months the European price has risen again. The futures on emission allowances (Eua) with delivery in December 2026 exceeded 86 euros per ton on July 22, now it is just above 81 euros. On March 20 it had fallen below 67 euros before recovering 30% in four months.
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Market characteristics
To understand the reasons for this trend, it is necessary to start from how this market works. CO2 emission permits are allocated both free of charge (based on benchmarks) and through public auctions, then they can be traded in a secondary market that sets the current price. The value depends on several factors: “The one that plays the biggest role is the so-called regulatory risk,” explains Andrea Ronchi, founder and CEO of the consulting firm CO2 Advisor. “Emission permits, unlike oil, gas, and coal, do not come from mines or deposits. They depend on the number of permits the Commission distributes and the regulations that give value to this commodity by creating scarcity.”
The system was created in 2005 and for many years scarcity remained more theoretical than real. In the first two phases, too many allowances were distributed – through the free allocation mechanism – without adequate correction mechanisms: “The 2008 economic crisis also led to a large reduction in emissions due to the decline in industrial production and not because of decarbonization initiatives,” recalls Ronchi. At the beginning of 2017, the Eua was worth about five euros, but the market changed and the price has been steadily above 70 euros since 2022.
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The rebound after the crash
In January 2026, the European emission allowance (Eua) had exceeded 90 euros. Then came the statements of German Chancellor Friedrich Merz, who said he was willing to review up to suspend the Ets system, and the price lost almost 20% since the beginning of the year.
According to Ronchi, “the collapse in the first quarter of 2026 was an anomaly caused by a new weight of regulatory risk, within a long-term upward trend.”
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