Redshaw Advisors Logo
Subscribe →

Carbon spikes 49% in just over 2 weeks

EU Carbon Prices Rally as Energy Market Rebounds

In a surprising turn of events, European Union Allowances (EUAs) broke above the EUR 21/t threshold for the first time in three weeks, driven by the ongoing recovery of energy prices. The Dec 20 EUA contract, considered the benchmark, traded 4.2% higher at EUR 21.26/t on Ice Futures.

Carbon prices have experienced a remarkable surge of 49% since hitting a 21-month low of EUR 14.34/t just over two weeks ago. This unexpected recovery has left many industry insiders astounded, as there has been minimal improvement in the overall macroeconomic outlook.

Yan Qin of Refinitiv highlighted the persistent rally in EUAs, despite some believing it to be excessive. Speculation arose that carbon prices might be aiming to bridge the "gap" in prices that occurred between March 13, when the market reached a low of EUR 21.75/t, and March 14, when prices opened at an intraday high of EUR 21.50/t.

Traders were taken aback by the fact that carbon prices are now only EUR 1.50 short of pre-pandemic levels, considering the unprecedented global situation. The recent gains are attributed to a combination of factors, including short-covering, stronger energy prices, compliance buying ahead of the April deadline, and reduced auction supply for the next two weeks, according to Tom Lord of Redshaw Advisors.

Optimism has also emerged due to the slowdown in the rate of COVID-19 infections across various European countries, contributing to a more positive economic sentiment overall.


Table of Contents
Primary Item (H2)
Share this:

More Insights

CORSIA: Navigating the next phase in carbon offsetting

From 2027, CORSIA becomes mandatory. Aligning EU & UK ETS rules, avoiding credit shortages, and managing political uncertainty will test even the best-prepared operators...
Read More

Public consultation launched for including Greenhouse Gas Removals in the UK ETS

Introduction The risks associated with climate change demand an urgent worldwide response. Reaching the temperature targets set out in the 2015 Paris agreement requires greenhouse […]
Read More

Compliance carbon markets, a bright future ahead

Compliance carbon markets have become an essential tool for lawmakers around the world, and commodity researchers believe that their rise will continue throughout the next […]
Read More
1 2 3 70
All Insights

Subscribe to the WeeklyRed

Stay ahead with our WeeklyRed  - your go-to source for comprehensive, insightful updates on global compliance and voluntary markets as well as renewable energy.
Every Monday, fresh into your inbox.
Subscribe
2025 Redshaw Advisors Ltd. All rights reserved.
crossarrow-right