The CO2 Market – 21.10.2021

EUA Price Forecast

The EUA price shows a higher volatility in October plunging from 64.64 euro/tCO2 the highest level on 5th October to 54.52 euro/tCO2 on 19th October and raising up to 57.64, closing price from 20th October. We are reticent in making any predictions on the CO2 price in the forthcoming days and believe that this characteristic of volatility will continue to maintain uncertainty on the market which is highly linked to the energy and gas prices and often to political decisions and declarations by the European Commission and Member States.

Reuters survey of eight analysts have raised their European carbon market average price forecasts after soaring global gas prices led some electricity generators to switch to more polluting coal-fire power, ramping up demand for carbon permits.

EU Allowances (EUAs) are expected to average the following prices:

  • 55.88 euros a tonne in 2021
  • 69.87 euros in 2022 (up 7.4% and 12.1% respectively from forecasts made in July)
  • 72.04 euros a tonne in 2023 (representing a 16.8% increase)

At the same time, The World Energy Outlook 2021, released this month, also calls for an “international catalyst” to address a shortfall in clean energy investments in developing countries. It also predicts that carbon prices in developed countries will rise to an average of $250 per tonne of CO2, and $200 in China, Brazil, Russia and other major economies, under a scenario in which the world achieves Net Zero emissions by 2050.

Source: Reuters & International European Agency

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