EU Emissions Trading System (EU-ETS) Price Overview 2023-2025
In February 2023, carbon allowances traded on the European Union Emissions Trading System (EU-ETS) surpassed 100 euros per metric ton of CO₂ for the first time. This milestone marked a significant point in the carbon market.
The EU-ETS, established in 2005 as the world’s first carbon market, aims to limit greenhouse gas emissions by assigning a price to carbon emissions. This creates an economic incentive for companies to reduce their emissions.
Mechanism of the EU-ETS
- A fixed number of emissions allowances are released into the market annually.
- Companies can trade these allowances among themselves.
- The total number of allowances decreases every year, gradually tightening emission limits.
Market Phase and Price Trends
The EU-ETS is currently in its fourth phase, spanning from 2021 to 2030. Since the 2018 reform, average annual EUA prices increased significantly, although they declined year-on-year in 2024 to a lower level.
Price Comparison
- The EU-ETS has one of the highest average annual carbon prices globally, averaging a high value in U.S. dollars.
- During the same period, UK ETS carbon credit prices averaged 57 U.S. dollars.
- The Regional Greenhouse Gas Initiative (RGGI) in the United States had significantly lower average prices.
"The scheme was introduced as a way of limiting GHG emissions from polluting installations by putting a price on carbon, thus incentivizing entities to reduce their emissions."
Data source: Ask Statista Research Service (release date corresponds to site access).
Summary: The EU-ETS, pioneering since 2005, reached over 100 euros per ton CO₂ in 2023, maintaining one of the world’s highest carbon prices while progressively tightening emission caps.
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