Finance
EU Carbon Prices Slide After Lawmakers Signal Market Intervention
Published by Global Banking & Finance Review®
Posted on March 17, 2026
2 min readLast updated: March 17, 2026
Quick Summary
EU carbon prices fell about 5%—to a low of around €65.4/tonne—after E.C. President Ursula von der Leyen signaled potential market intervention via more permits and reserve adjustments to contain soaring energy costs amid geopolitical tensions.
EU Carbon Prices Drop as Lawmakers Signal Possible Market Intervention
EU Carbon Market Reacts to Potential Policy Changes
LONDON, March 17 (Reuters) - The benchmark EU carbon contract fell 5% on Tuesday morning after the European Commission president said late on Monday that the bloc could make more carbon emissions permits available to help curb high energy prices.
Energy Price Surge and Economic Impact
European benchmark gas prices have increased by more than 50% since the U.S.-Israeli war on Iran began last month, driving up power costs and reviving concerns over Europe's international competitiveness.
Commission President’s Proposal
In a letter to European Union leaders before a Brussels summit on Thursday, Commission President Ursula von der Leyen said the EU would allow more state aid to industries and also propose adjustments to a reserve regulating the supply of emission permits in the EU carbon market to help curb prices. The benchmark EU carbon contract was down 3.59 euros at 65.41 euros a metric ton by 10.41 GMT, its lowest level since April 2025. "The European carbon market continues to fall this morning... expectations are growing that we will soon see some sort of market reform which will lower the speed of allowance removal from the market," analysts at Mind Energy said in a daily research note.
Market Analyst Commentary
(Reporting by Susanna Twidale;Editing by David Goodman and Emelia Sithole-Matarise)
Key Takeaways
- •EU carbon allowance prices dropped to their lowest level since April 2025 (about €65.41/tonne) following hints of policy intervention from Brussels. (sbs.eco)
- •Markets are pricing in possible reforms to the Emissions Trading System (ETS), including slowing the removal of allowances and easing competitiveness pressures on industry. (think.ing.com)
- •Further volatility looms ahead, with the European Commission planning an ETS review in Q3 2026, and energy-intensive sectors pushing back amid rising gas prices tied to the U.S.–Israeli–Iran conflict. (opis.com)
References
Frequently Asked Questions about EU carbon prices slide after lawmakers signal market intervention
1Why did EU carbon prices fall on Tuesday morning?
EU carbon prices fell 5% after the European Commission president signaled more emissions permits may be released to curb high energy costs.
2What impact did energy prices have on the EU carbon market?
Rising European gas prices, driven by geopolitical tensions, led to higher power costs and renewed concerns about competitiveness, affecting the carbon market.
3What changes to the EU carbon market are being considered?
The EU may propose adjustments to a reserve regulating emission permit supply and allow more state aid to industries to help lower prices.
4Who commented on the expected EU carbon market reforms?
Analysts at Mind Energy noted growing expectations for market reforms that would reduce the speed of allowance removal.
5What was the price of the benchmark EU carbon contract mentioned in the article?
The benchmark EU carbon contract was down 3.59 euros at 65.41 euros a metric ton by 10.41 GMT, its lowest level since April 2025.
