March 1, 2024

Carbon prices fall alongside European fuel prices

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European carbon prices have dropped below 60 €/t in the past week, lowest levels since Q3-21. Two key drivers:

  • Weak power & fuel demand, reducing demand for EUAs
  • TTF prices moving to the bottom of the coal to gas switching range across winter 2023/24, further reducing carbon emissions in the power sector.

There are several key areas to watch out for moving forward however:

  • The extent of any power & fuel demand increase as prices decrease
  • The phased inclusion of shipping in the EU ETS from January this year
  • The longer term EU cuts to the supply of ETS permits (62% committed cuts by 2030).

We will be delving into the impact of the inclusion of shipping in EU ETS in this Monday’s blog article.

Carbon prices fall alongside European fuel prices