BNEF: EU ETS allowance prices to rise to EUR 150/t by 2030

Researchers at BloombergNEF (BNEF) have slightly lowered their estimate for the average price of allowances in the European Union Emissions Trading System (EU ETS) during the current fourth trading period (2021-2030), to EUR 104/t from EUR 108/t in their outlook for the first half of this year. Despite current price declines, they still expect allowance prices to rise over the medium term and approach EUR 150/t in 2030. 

The slight downward revision to the expected rise in allowance prices reflects current market conditions. Alongside lower demand for allowances from the power generation sector, these are affected by a proposal to release allowances onto the market early, even though they were originally due to enter the market only in future years. The European Union aims to raise additional funds to finance the REPowerEU plan through the proposal.

Among other factors, in response to the developments described above, allowance prices have fallen in recent months and are currently just above EUR 80/t.