Published by Global Banking & Finance Review®
Posted on March 27, 2025
2 min readLast updated: January 24, 2026
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France urges the EU to stabilize CO2 emissions prices by setting a price corridor, aiming to curb market volatility and align with emission targets.
By Kate Abnett
BRUSSELS (Reuters) - France has revived calls for the European Union to restrict prices in its carbon market by fixing a "corridor" to limit volatile price movements, a government document seen by Reuters showed.
The EU emissions trading system is the bloc's main CO2-cutting policy, which requires power generators and industrial manufacturers to buy a CO2 permit for every tonne of CO2 they emit.
The scheme creates a financial incentive to pollute less, and raises revenues that go towards CO2-cutting projects - but it has long incurred criticism from countries including Poland, which has complained that financial speculators are driving volatile price moves in the market.
France has revived concerns over the carbon price, and will propose in a closed-door meeting of EU countries' ministers on Thursday that the EU needed to step in to stabilise the price.
A French government paper, seen by Reuters, called for the EU to "establish an ETS price corridor defined in coherence with the Union's emission reduction target and to review the functioning of the market stability reserve to correct its imperfections".
A price corridor would set minimum and maximum price limits, restricting price movements to trade within this range.
Speaking to reporters in Brussels, French climate minister Agnès Pannier-Runacher said the EU needed to give "long-term pricing signals to companies so that they can adapt and anticipate".
France will seek support among other countries on Thursday, but officials told Reuters some - including the Czech Republic - are already behind the idea.
A European Commission spokesperson declined to comment on the French demand. Currently, the EU is not due to review the ETS policy until 2026.
Benchmark EU carbon prices were trading at around 70 euros per tonne of CO2 on Thursday, having mirrored decreases in gas prices in the last few months.
ETS prices had breached 80 eur/t earlier this year, but have not returned to anywhere near the highs of more than 100 eur/t seen in 2023.
Analysts however forecast prices could rise to over 100 euros a ton by the end of the decade as supply of caron permits becomes tighter.
(Reporting by Kate Abnett; Editing by Angus MacSwan)
The article discusses France's proposal for the EU to stabilize CO2 emissions prices by setting a price corridor.
France aims to limit volatile price movements in the EU carbon market and align with emission reduction targets.
The EU ETS is a system requiring power generators and industrial manufacturers to buy CO2 permits for emissions, incentivizing pollution reduction.
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