EU
The European Union Allowance (EUA) prices for September averaged at EUR 65.32 per tonne, down 8.41% from the previous month. Throughout September, factors such as reduced geopolitical uncertainty, lower risks in gas supply, high renewable energy production, and weak industrial demand led to a downward trend in EUA prices. As the end-of-month compliance deadline approached, prices showed no signs of recovery, mainly due to lower-than-expected emissions from the power and industrial sectors last year and the slower-than-expected reduction in total allowance supply. Although the approaching winter is expected to increase demand for allowances, the overall market lacks growth momentum, especially as the manufacturing sector still faces a slow recovery amidst central banks maintaining low interest rates.
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China
The China Emission Allowance (CEA) prices for August averaged at RMB 93.22 per tonne, up 2.63% from the previous month. The main drivers of this price increase throughout September were policy-driven factors and compliance pressure. Early in the month, China announced that its carbon market would expand to include three major industries, in addition to the existing power sector, covering at least 60% of the country’s greenhouse gas emissions. This led to market expectations of tighter future supply, prompting companies to enter the market early. Furthermore, as the year-end compliance deadline approached, companies raised their demand for allowances to meet regulatory requirements, causing prices to once again break the RMB 100 mark by the end of the month, reaching the highest point since May 9, 2024. Looking ahead, with strengthened regulatory oversight and the progress toward the compliance deadline, CEA prices are expected to continue rising.