In our recent report, ClearBlue Markets has used its proprietary fundamental model to analyze the supply and demand dynamics in the EU ETS 2, complete with allowance price forecasts. The report also examines a scenario based on emissions from the European Commission’s impact assessment and provides an in-depth analysis of the key bullish and bearish factors influencing the ETS 2 market outlook.
Read Montel's coverage of this report here.
Key takeaways:
- ClearBlue Markets anticipates a 20% reduction in emissions covered by the ETS 2 by 2030, from 2023 levels of 1303 Mt
- ClearBlue's base-case analysis predicts an initial oversupply in 2027, leading to an average price of EUR 55. Prices are expected to gradually increase to around EUR 105 by 2030
- In a lower-emission scenario, where ETS 2 emissions drop to 860 Mt by 2030 in line with the European Commission’s impact assessment, average prices are projected to rise only slightly to EUR 68 by 2030
- Demand for allowances in ETS 2 will be influenced by overlapping policies, such as energy efficiency targets, incentives and subsidies for biofuels, electric vehicles, and heat pumps
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