Carbon Price Forecast: What is the Outlook for EUAs by 2030?
The European carbon market is entering a period of historical tightening. Following a consolidation phase in 2024, analysts expect a structural appreciation of the EUA price, driven by the phase-out of free allocations and the high ambitions of the "Fit for 55" plan. Here is a breakdown of the price scenarios for the years ahead.
Investing in carbon allowances requires looking beyond daily market noise. While EUA prices have shown resilience in the face of energy shifts, forecasts for 2025 and beyond point in a clear direction: upward. For the strategic investor, the question is no longer whether the price will rise, but at what pace the "programmed scarcity" enforced by the European Union will transform this market.
1. Analyst Consensus for 2025 and 2026
Leading financial institutions and research firms (such as BloombergNEF and Energy Aspects) generally agree on a progressive rebound. After absorbing the temporary surplus of allowances from the REPowerEU plan, the market is expected to return to a tighter supply-demand balance.
- 2025 Outlook: Average forecasts fluctuate between €80 and €100 per ton, supported by a recovery in European industrial activity.
- 2026 Outlook: Breaking the symbolic €100 barrier is anticipated by many models, coinciding with the acceleration of the auction supply reduction.
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2. The 2030 Trajectory: The Phase 4 "Scissor Effect"
This is where the primary potential for wealth diversification lies. Between now and 2030, we will witness a "scissor effect":
- Drastic Supply Cut: The Linear Reduction Factor (LRF) removes more allowances from the market every year.
- Expanding Demand: Driven by the full integration of the maritime sector and the reduction of free permits for aviation and heavy industry.
Some institutional scenarios suggest prices exceeding €140 to €150 by 2030 to incentivize heavy industries to adopt breakthrough technologies like green hydrogen.
3. Catalysts That Could Accelerate the Upside
Several factors could push prices beyond current baseline forecasts:
- The Launch of ETS 2 in 2027: While technically independent, it will reinforce the overall psychological floor for carbon costs in Europe.
- Increased Financial Participation: As the market becomes more liquid and transparent, the entry of large-scale investment funds can create rapid demand shocks.
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4. Downside Risks to Monitor
Any honest analysis must include potential headwinds:
- Prolonged Economic Downturn: A recession would reduce industrial output and, consequently, the demand for allowances.
- Technological Breakthroughs: If decarbonization suddenly becomes significantly cheaper than anticipated, the upward pressure on allowance prices could ease.
FAQ: Carbon Price Forecasts
What was the record high for carbon prices?
The price neared €100 per ton in February 2023. It has since consolidated, offering what many analysts consider an attractive entry point before the 2026 tightening.
Why are these forecasts more reliable than oil price predictions?
Because oil supply depends on geological discoveries and global geopolitics, whereas the EUA supply follows a transparent, legislated calendar voted on by the European Parliament.
How does Homaio utilize these forecasts?
Our solutions allow investors to gain exposure to this asset class with a long-term vision, aligned with the European Union's regulatory cycles.
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