EU ETS Holds Near EUR 84 as Invalidated Chinese Offsets Expose Gaps in Carbon Credit Verification
Thirty Chinese projects claiming 2.1 million phantom tonnes were voided, raising questions about the audit standards underpinning Europe's EUR 260 billion carbon market.
The ICE Endex EUA Dec 26 contract last settled at EUR 83.84 per tonne as of Sunday (2026-09-06), sustaining gains built since a US-Iran peace agreement drove prices sharply higher in June. The EU Emissions Trading System underpinning those contracts processes roughly EUR 260 billion in annual turnover, according to Corriere della Sera reporting published Friday (2026-09-04), placing it among the world's largest regulated carbon markets.5
That scale has drawn in financial investors well beyond the industrial emitters originally obligated to participate. Power companies, manufacturers, and large fund managers now all operate in the same pool. The result amplifies price sensitivity to events that would not obviously touch a compliance mechanism designed around factory emissions.5
The Iran-US diplomatic arc showed this plainly. On Monday (2026-06-15), the ICE Endex Dec 26 EUA contract reached EUR 79.68 per tonne, up roughly 3 percent from Friday (2026-06-12)'s settlement of EUR 77.17 per tonne, after the announcement of a US-Iran peace deal, Montel reported. Analysts were forecasting at the time that prices could breach EUR 80 per tonne during the week of 2026-06-15.3
A more turbulent episode had come three weeks prior. On Wednesday (2026-05-20), European carbon prices fell initially after the United States rejected Iran's latest peace proposal over the preceding weekend, before recovering to strong afternoon gains as positive fundamental sentiment spread among traders, Carbon Pulse reported. UK Allowances jumped to a three-month high that same session.1
The link between Middle East risk and European carbon runs partly through fossil fuel prices — tighter crude conditions feed into gas-to-coal switching economics and alter EUA demand from power generators. But the ETS also carries a growing layer of financial positioning that reacts to broader risk sentiment.1
Away from geopolitics, the quality of carbon credits presents a slower-moving problem. Bloomberg reported on Sunday (2026-05-24) that 30 Chinese carbon projects had been invalidated after scrutiny linked to a former UN adviser on carbon credits. Those projects had collectively claimed to save 2.1 million tonnes of CO2, roughly equal to the annual emissions of 500,000 cars or the power use of 300,000 homes. They had already sold credits equivalent to almost 500,000 tonnes of CO2 to countries other than Germany. The credits were voided, but buyers could not recover what they paid.2
The episode carries weight beyond its direct tonnage. The European Commission has set a target to cut EU emissions by 90 percent against 1990 levels by 2040, and its plans include limited use of high-quality international carbon credits, according to the same Bloomberg reporting. The Commission has not yet specified which auditing firms will verify those future purchases.2
Analysts have flagged separate near-term pressures on EUA prices. A Reuters survey of analysts published in July 2025 (2025-07-16) found forecasts for EU carbon kept roughly steady, with the threat of US tariffs and weak European industrial output cited as weighing on expectations for the year ahead.4
The ICE Endex Dec 26 contract settled at EUR 83.84 per tonne as of Sunday (2026-09-06), comfortably above the EUR 80 threshold analysts were targeting in mid-June. Yet the Commission has not identified which auditors will verify the international carbon credits included in its 2040 plan, and that unspecified standard is the thing multi-year holders of EUAs will eventually have to price.2,3