How have US tariffs affected EU carbon prices?

Trade tariff announcements from the United States have raised concerns about stalling economic growth in Europe, which could reduce industrial output and demand for carbon allowances.

What is the expected trend for carbon prices in the coming years?

All analysts surveyed expect carbon prices to rise as the cap on emissions decreases under the EU's Emissions Trading System (ETS).

What changes are expected in the EU's carbon market after 2025?

The market is anticipated to tighten significantly from 2026, with both auction and free allocation supply decreasing, leading to higher carbon prices.

What are the average EUA forecasts for 2026 and 2027?

The average EUA forecast for 2026 is 91.08 euros/ton, and for 2027, it is 108.70 euros/ton, both showing slight decreases from earlier forecasts.

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Home > Headlines > Analysts' EU carbon price forecasts steady as US tariff concerns linger

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Analysts' EU carbon price forecasts steady as US tariff concerns linger

Q: What are the current forecasts for EU carbon prices?

Analysts forecast EU Allowances (EUAs) to average 73.54 euros/metric ton for the third quarter of 2025, slightly down from previous estimates.

Published by Global Banking & Finance Review®

Posted on July 16, 2025

2 min read

Last updated: January 22, 2026

Analysts' EU carbon price forecasts steady as US tariff concerns linger - Headlines news and analysis from Global Banking & Finance Review

EU Carbon Price Predictions Remain Stable Amid US Tariff Concerns

By Susanna Twidale

LONDON (Reuters) -Analysts have kept their forecasts for prices in the European Union’s carbon market roughly steady with the spectre of tariffs from the United States and weak industrial output weighing on expectations.

The EU's Emissions Trading System (ETS) is Europe’s main tool for curbing emissions. It forces manufacturers, power companies and airlines to pay for the carbon dioxide they emit by surrendering carbon allowances.

According to a survey of ten analysts, EU Allowances (EUAs) are forecast to average 73.54 euros/metric ton for the third quarter of 2025, slightly down from the 76.10 euros/metric ton forecast made in April.

“EU carbon prices have struggled through 2025 due to geopolitical uncertainty and trade turmoil, which have limited upside potential”, said Veyt carbon market analyst Henry Lush.

Trade tariff announcements from the United States have stoked fears of stalling economic growth in Europe which could dent industrial output and along with it demand for carbon allowances.

The benchmark EU carbon contract traded at 71.30 euros a metric ton on Wednesday, down around 15% from 2025's intra-day peak of 84.50 euros/ton in late January.

The average forecast for 2025 was 75.15 euros/ton, slightly up from 74.89 euros/ton.

All the analysts surveyed expected carbon prices to rise in the coming years as the cap on the amount of emissions that a sector, or group of sectors, can produce decreases under the ETS.

“The market should get substantially tighter from 2026, with both auction and free allocation supply dropping away that year. Investors should start to price in some of that upcoming tightness as we get closer to 2026,” said Energy Aspects analyst Ben Lee.

Free allocations are given to businesses to help them compete with international competitors that are not subject to the same carbon costs. However, these will be reduced from next year when the EU launches its carbon border tax forcing importers to pay equivalent carbon costs.

The average EUA forecast for 2026 was 91.08 euros/ton, down from 91.37 euros/ton in April. The average forecast for 2027 was 108.70 euros/ton, down from 109.62 euros.

(Reporting by Susanna Twidale; Editing by Kirsten Donovan)

Analysts' EU carbon price forecasts steady as US tariff concerns linger

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EU Carbon Price Predictions Remain Stable Amid US Tariff Concerns

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