EUA Dec Closes Below EUR 83 as Reform Uncertainty Blocks Path to EUR 100
An analyst told Montel the fundamental case supports a 20% EUA price rise, but EU market reform proposals have suppressed the move.
ICE EUA Dec-rolling closed at €82.21/tCO2 on Friday (2026-08-28), well short of the EUR 100-plus level one analyst expects the contract to reach in the coming year. Speaking on Thursday (2026-08-20), that analyst told Montel that Europe's benchmark carbon price is on course to jump more than 20% on fundamental market drivers. Uncertainty over the EU's reform proposal for the Emissions Trading System is suppressing the upswing, the analyst said.6
That disconnect between fundamental support and the actual price reflects how deeply the reform debate has cut into market confidence. Each time the European Commission has moved toward reshaping the ETS, analysts have adjusted their forecasts lower. At the end of July (2026-07-31), Reuters reported that forecasters had cut their carbon price expectations for 2026 and 2027 after the Commission put forward proposals designed to ease the cost burden the ETS places on European industry. The proposals introduced the prospect of more allowances in circulation, a direct supply-side threat to any bullish forecast.7
LSEG moved earlier. On Thursday (2026-05-21), the data provider told Montel it had revised down its EU carbon price expectations. The driver it cited was not demand or weather. It was political pressure to reduce the ETS's impact on the continent's beleaguered industrial sector.2
Energy Aspects identified a specific supply mechanism behind the concern. The consultancy told Montel on Thursday (2026-05-21) that the EU's Industrial Decarbonisation Bank and the ETS investment booster scheme could bring additional allowances to market from next year, likely dampening prices. Those potential inflows sit alongside whatever the Commission decides on the Market Stability Reserve, also under review according to Euractiv's reporting from late May (2026-05-27). Together, they represent an uncertain but potentially significant drag on EUA prices.1,3
The downgrade cycle was already underway before summer. Reuters reported on April 30 (2026-04-30) that analysts had significantly cut EU carbon forecasts for the next couple of years, pointing to uncertainty over proposed policy changes and future supply levels. Three separate rounds of downward revisions in four months (April, May, and July) show how quickly the consensus has moved.4
Before reform risk dominated the narrative, the macro backdrop was already limiting upside. Reuters reported in July 2025 that US tariff concerns and weak European industrial output were keeping analyst EUA forecasts roughly flat. Industrial demand for allowances has stayed under pressure since. That structural softness made the fundamental bull case harder to sustain even before supply-side changes were proposed.5
The political conversation has also widened. Climate roundtable chief Andrei Marcu called in late May (2026-05-27) for the ETS to manage carbon costs rather than just prices, pressing for a rethink of market governance beyond short-term fixes, Euractiv reported. Coming from a climate policy insider rather than an industry lobby, that argument suggests the reform debate extends beyond allowance volumes. It concerns how the market is structured to operate over the longer term.3
The next number that matters is the Commission's supply estimate for the new instruments. If the allowances that Energy Aspects expects from the Decarbonisation Bank and the investment booster are front-loaded into 2026, the EUR 100 thesis becomes harder to sustain regardless of underlying demand dynamics.1,6