Carbon Market Watch — 2026-09-19
The EU ETS carbon price remains near €82.50/t, with policy uncertainty over proposed reforms driving analyst downgrades. In compliance markets, China’s ETS hit a record 961 million tonnes in cumulative volume but continues to suffer from stubbornly low pricing, while the Council agreed on targeted measures to protect energy-intensive sectors from carbon leakage. In the voluntary market, new analysis highlights the widening gap between public price averages and actual corporate budgets, ranging from €15 to €400 per tonne.
Carbon Market Watch — 2026-09-19
EU ETS Price Update
The EU ETS carbon price (EUA) has eased to approximately €82.48 per tonne of CO2, following a recent six-month high. This slight pullback occurs as analysts significantly cut their forecasts for European carbon prices due to uncertainty over proposed policy changes and future supply levels. The current price level sits well above the €75 per tonne mark predicted by some analysts earlier this year, reflecting ongoing volatility amid industrial slowdowns and regulatory debates.
Compliance Markets Roundup
China ETS: China's national carbon market reached a cumulative volume of 961 million tonnes in 2025. Despite this record volume, prices remain at roughly one-fifth of the IMF's recommended US$50 threshold, indicating that real industrial pressure remains deferred and pricing problems persist.
Germany BEH: As Germany transitions to the auctioning phase of its national emissions trading system in 2026, a price corridor is set with a minimum of €55 and a maximum of €65 per tCO2.
Global Compliance Growth: A new report by Mordor Intelligence projects the global compliance carbon credit market will reach USD 5.91 trillion by 2031, driven by ETS expansion and increased corporate compliance requirements.
Voluntary Carbon Market
Price Disparities: New analysis reveals that public averages for carbon credits are misleading. Companies actually pay between €15 and €400 per tonne depending on the methodology, with significant variance in real corporate budget allocations.
Registry Standards: C-GEO futures contracts continue to focus on tech-based, non-AFOLU offset projects from the Verra registry that align with the Integrity Council for the Voluntary Carbon Markets' Core Carbon Principles (CCPs).
Policy & Regulation
EU Council Agreement on Carbon Leakage: The Council set its position on a revised law to increase free carbon allowances for sectors falling under heat and fuel ETS benchmarks from 2026 to 2030. This targeted measure aims to protect energy-intensive industries from carbon leakage while balancing industrial competitiveness with climate goals.
CBAM Impact on India: As the EU's Carbon Border Adjustment Mechanism (CBAM) reshapes global trade, India's ability to measure and verify emissions is becoming critical for exporters. The lack of consensus on global carbon accounting standards poses a risk to Indian net-zero border tax credits.
Analysis: Carbon Costs Now Define Aluminium Asset Valuations
The aluminium industry is undergoing a fundamental valuation shift, where carbon regulation is no longer just an operational cost but the primary driver of asset value. With the EU CBAM expanding its scope in 2028 and China’s ETS adding approximately 1,500 smelters to its coverage, the economics of "green metal" are decisively outpacing traditional production methods.
This development is critical because it moves carbon pricing from a compliance checkbox to a core component of asset valuation models. Investors and operators must now account for the embedded carbon costs of primary aluminium versus recycled or low-carbon alternatives. The disparity is stark: assets with high carbon footprints face steep devaluation risks as border taxes and domestic carbon prices rise, while low-carbon producers command a premium.
Stakeholder reactions indicate a rush toward decarbonization technologies and renewable energy sourcing for smelting operations. The regulatory pressure from both the EU and China creates a dual-front challenge for global supply chains, forcing a re-evaluation of long-term capital expenditures.
Forward implications suggest that by 2028, when CBAM fully impacts imports, non-compliant or high-emission aluminium assets could become stranded assets. The market is already repricing these risks, meaning that early adopters of green metallurgy will likely capture significant market share and valuation premiums in the coming years.
What to Watch Next Week
- EU ETS Auctions: Monitor upcoming allowance auctions for signs of continued price softening or stabilization near the €82.50 level.
- CBAM Implementation Details: Look for further guidance on verification standards for Indian and other non-EU exporters facing the new border tax.
- China ETS Price Movements: Watch for any regulatory adjustments in China aimed at lifting prices above the current one-fifth-of-IMF-threshold level.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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