EUA Dec Holds at EUR 83 as Reform Proposals Trigger Second Round of Analyst Forecast Cuts
Back-to-back analyst revisions since April reflect how European Commission reform proposals have steadily narrowed near-term EUA price expectations.
ICE EUA Dec-rolling was priced at €83.28/tCO2 as of Monday (2026-08-24), roughly 17% below the EUR 100 level some analysts had argued was within reach, after Montel reported on Thursday (2026-08-20) that political risk is the primary factor suppressing any sustained advance.4
Since April 2026, two rounds of analyst forecast cuts have followed European Commission moves to ease the ETS's industrial burden. On April 30 (2026-04-30), Reuters reported analysts had significantly reduced EU carbon price projections for the next couple of years, citing uncertainty over proposed policy changes and future allowance supply levels.2 The second round came on July 31 (2026-07-31). Reuters reported analysts cut forecasts for both 2026 and 2027 after the Commission formally proposed reforms designed to ease the carbon market's burden on industry.5 Each successive announcement has been read as a moderately bearish signal for allowance prices.
LSEG flagged the direction in April. In a note on Thursday (2026-04-23), the data provider said pressure to soften the carbon market's impact on Europe's beleaguered industry had already weighed on the CO2 price outlook, and LSEG revised down its price expectations.1 At the time, that read as an early warning. Events since have tracked it closely.
The industrial competitiveness argument driving that political pressure has been building for more than a year. Reuters reported in July 2025 (2025-07-16) that analysts kept their EUA forecasts roughly steady, with the spectre of US tariffs and weak industrial output weighing on expectations.3 The EU ETS, which Reuters described as Europe's main tool for pricing carbon across power generation and heavy industry, sits at the intersection of climate and trade policy. European manufacturers facing competition from less carbon-constrained jurisdictions have argued the ETS price is an unacceptable cost burden. As the transatlantic trade environment has since deteriorated, that argument has grown louder. The Commission has been responsive.
The EUR 100/t level has nonetheless persisted in analyst projections despite successive cuts. The fundamental case for higher carbon prices remains broadly intact: the EU needs a sufficiently high CO2 cost to drive decarbonisation investment in harder-to-abate sectors. But the Commission's reform proposals have introduced supply-side uncertainty that price models cannot fully resolve. If future allowance volumes are adjusted, the equilibrium price shifts. The market has not yet been given the final parameters of any such adjustment.
ICE Endex TTF front-month gas closed Monday (2026-08-24) up 3.77% at €68.31/MWh, and German power ended the session up 1.14% at €136.71/MWh. EUA Dec did not track those moves. That suggests generation economics and fuel-switching dynamics are not the dominant pricing force right now; the regulatory calendar is.5,1
Analyst consensus signals remain net bullish on EUA, but a directional lean and a EUR 100 print are separated by considerable distance. The Commission has not confirmed the final parameters of its supply-side reform, and until it does, the market is pricing political risk as much as carbon fundamentals. Traders waiting for a move toward EUR 100 will need either reform terms that prove less generous to industry than currently expected, or a demand-side shock large enough to cut through the supply uncertainty.4,2,5