EU-ETS allowance prices in the European Union 2022-2023

The price of emissions allowances (EUA) traded on the European Union's Emissions Trading Scheme (ETS) reached a record high of 100.34 euros per metric ton of CO₂ in February 2023. Average EUA spot prices have increased significantly since the 2018 reform of the EU ETS.

What is the EU-ETS?

The EU-ETS became the world’s first carbon market in 2005. The scheme was introduced as a way of limiting GHG emissions from polluting installations by putting a price on carbon, thus incentivizing entities to reduce their emissions. A fixed number of emissions allowances are put on the market each year, which can be traded between companies. The number of available allowances is reduced each year. The EU-ETS is now in its fourth phase (2021 to 2030).

Volatility of carbon prices

EU carbon prices are volatile and change daily. Prices are determined by the supply and demand of allowances. In March 2022, the outbreak of the Russia-Ukraine war caused EUA prices to crash to less than 60 euros/tCO₂ due to the expected ban on Russian energy imports in Europe.