Carbon Market Watch — 2026-09-06

EU ETS Price Update

The EU Emissions Trading System (EU ETS) carbon price has settled at approximately €82.48 per tonne of CO2 as of late August/early September 2026. This represents a slight easing from a recent six-month high, according to the latest Europe Carbon Credit EU ETS Price Tracker by Epignosis Insights. The market is currently digesting analyst revisions that have cut price forecasts for the coming years due to uncertainty over proposed policy changes and future supply levels. Earlier reports indicated that allowances were expected to end the year around the €75 per tonne mark, but current spot prices remain elevated near €82.50.

Compliance Markets Roundup

No specific fresh price data for UK ETS, RGGI, California, South Korea, China, or New Zealand was available in the past 24 hours. However, broader context indicates that compliance markets are increasingly integrated with global standards like the Core Carbon Principles (CCPs), which influence credit quality across registries.

Voluntary Carbon Market

The voluntary carbon market (VCM) is experiencing significant growth, with projections indicating it will hit approximately €3 billion in 2026. This expansion is fueled by stricter regulations and the adoption of new integrity standards, specifically the Integrity Council for the Voluntary Carbon Markets (ICVCM) Core Carbon Principles.

• Market Growth: The market is expected to grow to €15 billion by 2035, representing a 20.59% CAGR.
• Credit Types: C-GEO futures contracts, comprising tech-based, non-AFOLU offset projects from the Verra registry that align with CCPs, are becoming standard for buyers seeking high-quality credits.
• Pricing Trends: Current prices for voluntary credits vary widely by methodology, ranging from €15 to €400 per tonne, with public averages often misleading corporate budgets.

Policy & Regulation

• US Carbon Border Study Opposition: The Institute for Energy Research (IER) submitted comments to the National Energy Technology Laboratory (NETL) opposing the treatment of a requested emissions-intensity study as a foundation for U.S. carbon taxes, border carbon adjustments, or tariffs. This highlights ongoing resistance in the US to adopting EU-style border mechanisms.
• UK Green Taxes Critique: A new report argues that "green taxes are decimating British industry," specifically calling for the removal of refineries from the UK Emissions Trading Scheme (UK ETS). The report suggests that applying this analysis to the rest of the economy could undermine the justification for the entire scheme.

Analysis: EU ETS Price Resilience vs. Policy Uncertainty

The EU ETS price holding steady near €82.50 despite analyst downgrades highlights a tension between market fundamentals and political intervention. While some analysts previously forecasted a drop to €75 due to industrial slowdowns, the current price level suggests that traders are pricing in the long-term scarcity of allowances under the "Fit for 55" package and the impending expansion of the ETS to cover buildings and transport (ETS II).

The Epignosis Insights report notes that prices are "easing" from highs, which may indicate short-term profit-taking or response to temporary demand softness. However, the broader context of policy reforms remains the dominant driver. Recent discussions about potential market interventions—such as releasing more permits to curb energy prices—have previously caused significant volatility. The market's ability to maintain the €80+ level suggests that investors view these interventions as unlikely or insufficient to alter the structural deficit of allowances.

For corporate buyers, this price level reinforces the urgency of decarbonization strategies. At €82 per tonne, the cost of compliance is becoming a material line item for heavy industry, particularly in sectors like cement, steel, and chemicals. The divergence between spot prices and lower annual forecasts creates a hedging dilemma: companies must decide whether to buy now at elevated prices or risk higher costs if policy tightening accelerates faster than anticipated.

What to Watch Next Week

• EU ETS Auction Results: Monitor upcoming allowance auctions for changes in bid-to-cover ratios, which can signal shifts in industrial demand.
• CBAM Implementation Updates: As the EU Carbon Border Adjustment Mechanism fully kicks in, watch for official guidance on certificate pricing and importer compliance deadlines.
• UK ETS Reform Proposals: Follow reactions to the report calling for refinery exemptions from the UK ETS, which could influence government stance on industrial carbon leakage.
• Voluntary Market Standards: Look for new project validations or issuances from Verra and Gold Standard that adhere to ICVCM Core Carbon Principles, as these will set benchmarks for high-quality credit pricing.