Carbon Market Watch — 2026-11-03
The EU ETS saw spot carbon permits auctioned at €89.43 per tonne on November 2, with the Q3 2026 CBAM certificate price set at €82.32. Significant geopolitical tension has emerged as Canada seeks an exemption from the EU's Carbon Border Adjustment Mechanism (CBAM), while the USTR is actively seeking comments on CBAM's impact on US trade. Meanwhile, policy debates within the EU continue regarding the integration of external carbon credits into the ETS and the stringency of the system's cap.
Carbon Market Watch — 2026-11-03
EU ETS Price Update
On Monday, November 2, 2026, the European Union sold 2.792 million spot EU carbon permits (EUA) at €89.43 per tonne on the European Energy Exchange (EEX). This auction follows a period where prices had hovered near €88 per tonne in October, indicating a slight upward movement or stabilization at higher levels. The EU also set its Q3 2026 Carbon Border Adjustment Mechanism (CBAM) certificate price at €82.32 per tonne of CO₂, a 9.4% increase, marking the transition of the border mechanism from reporting to financial costs for importers.
Compliance Markets Roundup
- EU ETS: As noted above, the primary compliance market traded at €89.43/tonne in early November. Total revenues from the EU ETS since its inception have reached €265.7 billion, including revenues from associated funds and neighboring systems.
- Germany (National ETS): Germany is moving to extend its national carbon price corridor through 2027. The draft proposal maintains the 2026 corridor of €55 to €65 per tonne, aligning with agreements made by Germany’s governing coalition earlier this year.
- RGGI (Regional Greenhouse Gas Initiative): Recent data indicates RGGI allowances are trading in the range of $22–29 per tonne, significantly lower than EU prices, reflecting different regional supply and demand dynamics.
Voluntary Carbon Market
- Core Carbon Principles: The market continues to focus on "Core" (C-GEO) futures contracts, which comprise tech-based, non-AFOLU (Agriculture, Forestry, and Other Land Use) offset projects from the Verra registry that align with Core Carbon Principles (CCPs) overseen by the Integrity Council for the Voluntary Carbon Markets.
- Methodology Reform & Vintage Risks: In the UK and broader voluntary markets, buyers face risks regarding credit vintage. A credit purchased in 2026 might still be a 2019-vintage project from methodologies that have since been called into question, despite Verra rolling out new versions in 2024.
- Registry Data: The Berkeley Carbon Trading Project continues to track all carbon offset projects and retirements globally across six major registries, including Verra and Gold Standard, providing essential transparency for market participants.
Policy & Regulation
- CBAM & Canada-EU Relations: Canada is effectively seeking an exemption from the EU's CBAM, according to internal documents seen by Euronews. Environment and Climate Minister Julie Dabrusin stopped short of endorsing cooperation on the EU's climate policy, partly because Canada does not meet the condition of having a carbon price aligned with the EU ETS. The definitive phase of CBAM began on January 1, 2026, exposing approximately C$2.8 billion of Canadian metals exports annually to the levy.
- US Trade Response: The Office of the United States Trade Representative (USTR) is actively seeking comments regarding the impact of the EU's CBAM on U.S. producers and exports. This request for comments, published in October, highlights growing trade tensions over the border adjustment mechanism.
- UK CBAM Implementation: The UK's own Carbon Border Adjustment Mechanism is approaching its January 2027 implementation date, with secondary legislation currently being established to define key actions and rules.
Analysis: Canada's CBAM Exemption Bid Tests EU-Canada Alliance
The revelation that Canada is quietly lobbying for an exemption from the EU’s Carbon Border Adjustment Mechanism (CBAM) marks a significant friction point in the transatlantic energy alliance. While Ottawa publicly supports global climate goals, internal documents suggest a reluctance to fully align with EU carbon pricing structures if it means paying the border tax without receiving preferential treatment. The EU's requirement for a full exemption is tied to having a carbon price comparable to the EU ETS, a threshold Canada’s domestic trajectory has not yet met.
This development comes as the definitive phase of CBAM imposes real financial costs on importers. For Canadian metals exporters, this represents a direct exposure of nearly C$2.8 billion annually. The tension is not merely economic but diplomatic, as the EU views CBAM as a critical tool against carbon leakage, while Canada views the levy as a potential trade barrier that undermines recent efforts to deepen energy cooperation.
Simultaneously, the United States is monitoring the situation closely. The USTR’s request for comments on CBAM’s impact on US producers indicates that Washington is preparing a robust response to what it may perceive as unfair trade practices. If Canada secures an exemption or a special deal, it could trigger retaliatory measures from other trading partners, including the US, who are already concerned about the extraterritorial reach of EU climate policy.
The outcome of these negotiations will likely set a precedent for how the EU handles carbon pricing disparities with other major economies. A lenient approach to Canada could weaken the integrity of CBAM by creating loopholes, while a rigid stance could fracture the emerging EU-Canada energy partnership. Stakeholders are watching closely to see whether climate policy or trade diplomacy takes precedence in the coming months.
What to Watch Next Week
- USTR Comment Deadline: Monitor developments following the USTR's request for comments on CBAM, as industry groups submit their positions on potential trade impacts.
- EU ETS Auctions: Continue tracking daily EEX auctions for spot carbon permits to gauge short-term price direction following the €89.43/tonne print.
- Carbon Market Watch Advocacy: Pay attention to ongoing campaigns by NGOs like Carbon Market Watch, which are arguing that integrating external carbon credits into the EU ETS could sabotage climate ambition.
- COP31 Preparations: With COP31 approaching, look for increased rhetoric on carbon leakage and border adjustments, particularly from SGs and other industry groups outlining CBAM rules.
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.
Powered by
