BloombergNEF forecasts for this decade
(sustainabilityenvironment.com) – Europe has managed to keep the bar straight during the energy crisis and preserve the efficiency of the EU carbon market. Thanks to the reforms implemented, the future price trajectory of the European Emission Trading Scheme (ETS) will continue to rise. Up to almost 150 euro/tCO2 in 2030.
It is the forecast of BloombergNEF based on the evolution of quota prices in the first half of 2023 and measures to stem the crisis in energy prices on the one hand and the abandonment of gas from Russia on the other.
“As the bloc managed to legislate for ambitious reforms during an energy crisis, quota prices stabilized around EUR 88 per tonne this year. This resilience has strengthened the effectiveness of the market as a political instrument of decarbonisation, pushing the economy in favor of low-carbon options in the absence of the Russian pipeline”, BNEF analysts write referring above all to the EU repower plan with which the 27 have raised the 2030 targets for renewables and energy efficiency.
What drives the growth of the EU carbon market?
From 88 euros per ton today, the EU carbon market is expected to continue its steady growth in 2024, rising to 94 euros. Then the curve, according to BNEF, should soar and quickly reach 149 euro/t at the end of the decade.
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In the long term, the “aggressive cuts in supply to align the market with the target of reducing emissions by 62% by 2030 compared to 2005” will push up the price of allowances in the long term. While uncertainties related to energy security remain a factor not to be underestimated. “Any market nervousness that reverses the energy production economy in favor of more emission-intensive coal, or the cold climate that puts an end to the persistent reduction in gas demand, could increase emissions and, consequently, quote prices and demand”.