UK Carbon Holds at £59.12 as CBAM Pricing Rules Take Effect and CDR Investment Stays Thin
UKA's discount to EU allowances now carries direct cost implications for exporters under CBAM's April 2026 pricing framework.
UK carbon allowances last traded at £59.12/tCO2 on September 17, unchanged in the session, according to live market data. The EU's Carbon Border Adjustment Mechanism pricing framework, set out in April 2026, now means that gap between UK and EU carbon carries a direct fiscal cost for UK exporters selling into the European single market.6
CBAM applies a carbon price to imports of cement, steel, aluminium, electricity and hydrogen. UK exporters must calculate embedded emissions against EU benchmarks, not domestic ones. With UKA sitting below the EU price, the shortfall feeds straight into importers' CBAM bills rather than being absorbed by the UK scheme.6
The removal side of the carbon market tells a different story about where capital is flowing — and where it is not. Frontier Climate, the purchasing group backed by Stripe, Google and Shopify, announced in a June 17 (2026-06-17) release that Anthropic had joined and that the group would commit $915 million to carbon removal companies. The announcement came in the week of June 15 (2026-06-15), according to Utility Dive. That is a large headline number.7
But global investment in carbon dioxide removal research and start-ups accounts for just 1.1% of total climate-tech investment, according to Energy Voice, despite estimates that the world needs to remove between 7 and 9 billion tonnes of CO2 per year by 2050 to keep Paris targets in reach. A 2024 University of Oxford-led report found that CDR investment peaked at around $1.5bn in 2022 before falling to $856m in 2023. The Frontier pledge, large as it sounds, sits against that backdrop of declining commitment.4
Deployment numbers are more sobering still. Around 20 direct air capture plants worldwide capture roughly 10,000 tonnes of CO2 per year in total, according to Energy Voice — a fraction of the billions of tonnes the climate arithmetic demands.4
The UK is attempting to move beyond that rounding error. Airhive and Mission Zero Technologies formed a joint venture to develop what would be Europe's largest direct air capture project, targeting 60,000 tonnes of CO2 annually two years after launch. Airhive is also a partner in the Deep Sky Alpha project in Canada and uses a fluidised bed system with calcium-based sorbents.5,4
Stockholm Exergi, which provides electricity and heating to most of Sweden's capital, plans to capture 800,000 tonnes of CO2 a year from its biomass-fired boilers — the largest single bio-based capture project in Europe if completed. It remains a plan rather than an operating asset.1
Biochar has drawn attention as a lower-cost removal path. A data centre developer unveiled an integrated biochar platform on May 28 (2026-05-28) targeting hyperscaler and institutional CDR demand, though the announcement sat behind a paywall at Carbon Pulse. The model links waste biomass conversion to corporate offtake, which appeals to buyers wanting removals without the energy intensity of direct air capture.3
A Belgian firm raised €17.5 million to scale plasma-based CO2 utilisation technology, reported May 26 (2026-05-26). The Economist has reported that CDR options are multiplying, including electrochemical seawater extraction with potential links to desalination, but that these routes remain energy-intensive.2,1
The funding picture stays constrained. A $915 million Frontier pledge sounds substantial until measured against the 1.1% share of climate-tech investment currently reaching CDR developers. Venture investors have not yet been persuaded by the cost curve.7,4
For UK carbon traders, the CBAM reporting burden is the near-term pressure point. Steel, cement and aluminium importers into the EU now have to account for embedded emissions, and the UK scheme's pricing must be defensible against Brussels' benchmarks. A persistent UKA discount is a straight transfer cost to exporters.6
The removal projects large enough to matter for supply — Airhive's 60,000-tonne target and Stockholm Exergi's 800,000-tonne plan — are years from delivering volume. Neither is operating. Watch whether Frontier's $915 million commitment gets contracted against biochar or other near-term delivery routes, or stays concentrated in a handful of engineered removal names with long lead times.5,17