The price of emissions allowances (EUA) traded on the European Union's Emissions Trading Scheme (ETS) exceed 100 euros per metric ton of CO₂ for the first time n February 2023. Athough average annual EUA prices have increased significantly since the 2018 reform of the EU-ETS, they fell 19 percent year-on-year in 2023 to 65 euros. What is the EU-ETS? The EU-ETS became the world’s first carbon market in 2005. 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. A fixed number of emissions allowances are put on the market each year, which can be traded between companies. The number of available allowances is reduced each year. The EU-ETS is now in its fourth phase (2021 to 2030). Volatility of carbon prices EU carbon prices are volatile and change daily. Prices are determined by the supply and demand of allowances. In March 2022, the outbreak of the Russia-Ukraine war caused EUA prices to crash to less than 60 euros/tCO₂ due to the expected ban on Russian energy imports in Europe.

EU Carbon Permits decreased 2.17 EUR or 2.97% since the beginning of 2025, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity. This dataset includes a chart with historical data for EU Carbon Permits.

European Union Emissions Trading System (EU-ETS) carbon allowances are estimated to average 65 euros per metric ton of carbon dioxide (tCO₂e) in 2024. This figure is forecast to more than double by the end of the decade to almost 150 euros/tCO₂e, before reaching nearly 200 euros/tCO₂e by 2035. EU-ETS carbon prices surpassed the 100 euros per metric ton threshold for the first time in February 2023.

Carbon prices across multiple emissions trading systems worldwide are expected to increase during the period of 2026 to 2030, compared to 2022 to 2026. The average EU ETS carbon price is expected to be 84.4 euros per metric ton of CO₂ during the period 2022 to 2025, but is projected to rise to almost 100 euros per metric ton of CO₂ during the period of 2026 to 2030, according to a survey of International Emissions Trading Association members. EU ETS carbon pricing broke the 90 euros per metric ton of CO₂ barrier in February 2022, and in February 2023 it surpassed 100 euros per metric ton of CO₂.

The average annual price of European Union Emissions Trading System (EU ETS) allowances fell 22 percent year-on-year in 2024, to 65 euros. Still, EU ETS carbon allowances are forecast to rise to almost 150 euros by the end of the decade. Each EU ETS emissions allowance (EUA) gives the holder the right to emit one metric ton of carbon dioxide equivalent.

These are inputs into the BEIS Carbon Price Models, which are used for analysis, including for estimating impacts on the carbon price of policy changes, and for producing BEIS's updated short-term traded carbon values for modelling purposes and for public policy appraisal. Updated short-term traded carbon values for modelling purposes have been used in the latest update to BEIS’s Energy and Emissions projections (EEP) and will be used in other models of electricity generation and investment across government. BEIS’s short-term traded carbon values for UK public policy appraisal are used for valuing the impact of government policies on emissions in the traded sector, that is those sectors covered by the EU Emissions Trading System (EU ETS). These data are not released: they are commercial in nature because they have been produced for the Department by external contractors under commercial contract.

As of April 2024, the European Union Emission Trading Scheme (EU ETS) carbon price was above 60 U.S. dollars per metric tons of carbon dioxide equivalent (USD/tCO₂e). The EU ETS launched in 2005 as a cost-effective way of reducing greenhouse gas emissions, and was the world's first major international carbon market. The UK was formerly part of the EU ETS, but replaced this with its own system after withdrawing from the EU. As of April 2024, the price of carbon on the UK ETS was 45 USD/tCO₂e.

This paper studies the heterogeneous effects of exchange rate and stock market on carbon emission allowance price in four emissions trading scheme pilots in China. We employ a panel quantile regression model, which can describe both individual and distributional heterogeneity. The empirical results illustrate that the effects of explanatory variables on carbon emission allowance price is heterogeneous along the whole quantiles. Specifically, exchange rate has a negative effect on carbon emission allowance price at lower quantiles, while becomes a positive effect at higher quantiles. In addition, a negative effect exists between domestic stock market and carbon emission allowance price, and the intensity decreasing along with the increase of quantile. By contrast, an increasing positive effect is discovered between European stock market and domestic carbon emission allowance prices. Finally, heterogeneous effects on carbon emission allowance price can also be proved in European Union Emission Trading Scheme (EU-ETS).

The cost of UK ETS carbon permits (UKAs) was around 100 GBP in February 2023, but prices have fallen considerably since then. Prices on January 16, 2025 were just 32.57 GBP, down 11 percent from the same date the previous year. Formerly part of the EU ETS, the UK launched its own cap-and-trade system in 2021 following Brexit. Why has the UK’s carbon price fallen? Several factors have contributed to falling UK carbon prices, including mild winter weather and reduced power demand, as well as a surplus of carbon allowances on the market. While prices have recovered marginally from the record lows, they remain markedly below carbon prices on the EU ETS. The low cost of UK carbon permits has raised concerns that it could deter investment in renewable energy. Future of UK ETS The UK ETS covers emissions from domestic aviation and the industry and power sectors, amounting to some 30 percent of the country’s annual GHG emissions. There are plans to expand the system over the coming years to cover CO₂ venting by the upstream oil and gas sector, domestic maritime emissions, and energy from waste and waste incineration. The UK is also looking to introduce a carbon border adjustment mechanism, which would place a carbon price on certain emissions-intensive industrial goods imported to the UK.

The size of the Compliance Carbon Credit Market was valued at USD 0.82 Million in 2023 and is projected to reach USD 2.16 Million by 2032, with an expected CAGR of 14.81% during the forecast period. The compliance carbon credit market is essential in the global initiative to mitigate greenhouse gas emissions, offering a structured approach for companies and nations to fulfill their regulatory requirements under climate policies. This market functions within cap-and-trade frameworks or carbon pricing systems established by governmental bodies and international accords, including the Paris Agreement. Entities that are subject to emission restrictions must either curtail their emissions or acquire carbon credits to offset any excess emissions. These credits signify verified reductions in greenhouse gases achieved through various projects, such as renewable energy developments, reforestation efforts, or methane capture technologies. The compliance carbon credit market has experienced substantial growth as an increasing number of regions adopt obligatory carbon pricing. Notable examples include the European Union Emissions Trading System (EU ETS) and California’s Cap-and-Trade Program, where industries are mandated to purchase credits to adhere to emission limits. This market creates a financial incentive for businesses to invest in cleaner technologies and practices, thereby encouraging innovation and contributing to a reduction in overall emissions. Nevertheless, the market encounters challenges, including the need for credible verification of carbon credits, the prevention of market manipulation, and the management of price fluctuations in carbon credits. Despite these challenges, the compliance carbon credit market continues to be a vital tool for achieving global climate objectives and advancing sustainable development. Recent developments include: April 2024: Regional efforts in the Western United States and Canada are gaining momentum as the urgency of combating climate change increases. Plans to link their carbon markets are being drawn up in California, Quebec, and Washington, which could significantly affect trading dynamics. The three authorities intend to work together to create a more extensive carbon credit market as soon as their proposed alliance takes effect., January 2024: The Commodity Futures Trading Commission (CFTC) issued proposed guidance on the listing of voluntary carbon credit (VCC) derivatives contracts on designated contract markets for the public to comment on the proposal.. Key drivers for this market are: Regulatory Mandates and Policies, Growing Corporate Sustainability Initiatives. Potential restraints include: Market Complexity and Uncertainty. Notable trends are: Charting the Course of Carbon Pricing: UK-ETS Post-Brexit.

Empirical result of European market.

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Carbon Credit Market Size 2025-2029

The carbon credit market size is forecast to increase by USD 1,966.3 billion at a CAGR of 32.1% between 2024 and 2029.

The market is experiencing significant growth due to rising emissions in the Earth's atmosphere, which necessitates the need for businesses and individuals to offset their carbon footprint. Booming investment and partnership deals in this market are driving its expansion, with various organizations recognizing the importance of reducing their carbon emissions and contributing to environmental sustainability. However, the fluctuating prices of carbon credits pose a challenge for market participants, as they can impact the profitability of carbon offsetting projects.
To stay competitive, market players must closely monitor carbon credit prices and adapt their strategies accordingly. In summary, the market is witnessing increasing demand due to growing environmental concerns and regulatory requirements, but its growth is influenced by the volatility of carbon credit prices.

What will the Carbon Credit Market Size during the forecast period?

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The market has gained significant traction in recent years as businesses and individuals seek to offset their carbon emissions and contribute to the global decarbonization effort. This market facilitates the buying and selling of carbon credits, which represent the right to emit a specific amount of greenhouse gases. The voluntary carbon market plays a crucial role in this context, enabling organizations to offset their carbon footprint beyond regulatory requirements. Net-zero greenhouse-gas emissions have become a key business objective, driving demand for carbon credits from various sources. Forestry projects are a significant contributor to the market. These projects involve the protection, restoration, or reforestation of forests, which act as carbon sinks, absorbing and storing carbon dioxide from the atmosphere.
Carbon emission reduction projects, such as renewable energy and energy efficiency initiatives, also contribute to the market. Carbon storage projects, including those focused on geological storage, are another essential component. The market's dynamics are influenced by various factors, including regulatory policies, market prices, and technological advancements. As the world moves towards a low-carbon economy, the demand for carbon credits is expected to continue growing, making it an attractive investment opportunity for businesses and individuals alike.

How is this market segmented and which is the largest segment?

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

End-user

  Power
  Energy
  Transportation
  Industrial
  Others


Type

  Compliance
  Voluntary


Geography

  Europe

    Germany
    UK
    France
    Italy


  Asia

    China


  North America



  Rest of World (ROW)

By End-user Insights

The power segment is estimated to witness significant growth during the forecast period.

Carbon credits represent financial instruments that enable organizations to invest in emission reduction projects, contributing to the global effort to transition from fossil fuels to renewable energy sources. These initiatives, which focus on conservation, biodiversity, and livelihoods, provide a means to reduce greenhouse gas emissions and mitigate the effects of climate change.

Additionally, the energy sector, specifically power generation, can benefit significantly from this shift, as renewable energy sources offer a sustainable and non-depleting alternative to coal and natural gas. To achieve the international goal of limiting global temperature rise to 2°C or 1.5°C above pre-industrial levels, the reduction of greenhouse gas emissions is crucial. Carbon credits facilitate this transition by incentivizing investment in renewable energy projects and reducing the overall carbon footprint.

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The power segment was valued at USD 61.30 billion in 2019 and showed a gradual increase during the forecast period.

Regional Analysis

Europe is estimated to contribute 84% to the growth of the global market during the forecast period.

Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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The European Union (EU) held a significant share of The market in 2023, with countries like the UK and Germany being major buyers. To achieve climate neutrality by 2050, the EU established the International Emissions Trading System (ETS) in 2005, which sets the cost of CO2 emissions

European Union Emission Trading System (EU-ETS) revenues reached a record high of 47.4 billion U.S. dollars in 2023. This accounted for around 63 percent of global emissions trading revenues that year. EU-ETS revenues from the auctioning of allowances has increased considerably in recent years, owing to factors like rising prices. EU ETS revenues go toward various end uses, including renewable energy development, low-carbon transportation, and improving energy efficiency.

Empirical results of panel quantile regression.

No description is available. Visit https://dataone.org/datasets/sha256%3A5e46c866f47199ee1a9a9b2e82fef2c7ba98388a1a9bdf513c9525651bfd910f for complete metadata about this dataset.

Variables’ definition.

The average closing spot price of European Emission Allowances (EUAs) has increased notably since reforms were made to the EU ETS in 2018. In 2022, the average closing spot price of CO₂ EUAs increased by roughly 19 percent to 47.3 euros per metric ton of CO₂.

The global Carbon Pricing Software market is experiencing robust growth, driven by increasing regulatory pressures, heightened corporate sustainability initiatives, and a growing awareness of climate change. The market, valued at approximately $1.5 billion in 2025, is projected to exhibit a Compound Annual Growth Rate (CAGR) of 15% from 2025 to 2033. This significant expansion reflects the rising demand for solutions that help organizations effectively manage and report their carbon footprint, comply with evolving environmental regulations (such as the EU ETS and similar schemes globally), and achieve their sustainability goals. Key drivers include the increasing adoption of cloud-based solutions offering scalability and cost-effectiveness, coupled with the expansion of carbon pricing mechanisms across various industries including oil and gas, coal, and chemicals. The market is segmented by deployment (cloud-based and on-premise) and application (spanning various industries). While the cloud-based segment is currently dominant, on-premise solutions maintain relevance for specific industry needs and data security concerns. The growth trajectory of the Carbon Pricing Software market is fueled by several trends. These include the increasing sophistication of carbon accounting methodologies, the integration of carbon pricing software with other enterprise resource planning (ERP) systems, and the growing demand for data analytics and reporting capabilities to optimize carbon reduction strategies. However, the market faces certain restraints, such as the high initial investment costs for some solutions, the complexity of implementing and integrating these systems, and the potential for data accuracy and reliability issues. Despite these challenges, the long-term outlook for the Carbon Pricing Software market remains exceptionally positive, underpinned by the global imperative to mitigate climate change and the increasing adoption of environmentally responsible practices across all sectors. Leading vendors such as Sinai Technologies, Trucost, Microsoft, SAP, and Atmosfair are actively shaping market development through innovation and expansion. Geographical expansion, particularly in developing economies with burgeoning industries, further contributes to market growth potential.

The price of one carbon allowance under the United Kingdom Emissions Trading Scheme (UK ETS) was 45.06 U.S. dollars per metric ton on April 1, 2024, This was roughly half of what one allowance cost a year earlier. The UK ETS launched in 2021 after the country's withdrawal from the European Union, and covers emissions from energy-intensive industries, the power generation sector, and aviation.

The transport sector is responsible for around 20% of global CO2 emissions, and road transport alone contributes to three-quarters of that share. Since the European Union will implement a separate Emissions Trading System in 2027, which will cover road transport, buildings and additional sectors (mainly small industry), the study considered the idea for the UK. The research specifically explored differences in perceptions of fuel price increases as a result of an increase in fuel duties or as a result of the introduction of a parallel Emissions Trading System for road transport. A Serious Game was used to elicit perceptions. In the game, called the Commuter Dilemma Game, car drivers were presented with situations where they needed to make decisions in response to an increase in the pump price of fuel. The sample was a convenient sample, and therefore not representative.

The players had to make decisions during the game were the essential, and these were aimed at triggering a discussion about the perception of an increase in the pump price of fuel resulting from different policies. Six decisions could be made:

a) To choose which transport mode to use (car, bus, bicycle, walk), each with an associated time and fuel cost, b) To replace their car with a more efficient car, c) To not visit some of the facilities (such as health, education, shopping or leisure facilities) to reduce expenses, d) To move house, e) To complain about the policies triggering an increase in pump prices (with the complaint being some sort of formal complaint to the government, or simply moaning), and f) To join a demonstration against the pump price increase.

This mini-project was supported by a PhD studentship held by Allan Peñafiel Mera and an UKRI grant held by Georgina Santos. It was a four-month project (June to Sept 2022), which fed into the bigger projects listed above. This mini-project was entitled: "Transport policy evaluation: A mixed-method approach for assessing differences between a fuel duty and a midstream emission trading system." The project explored differences in perceptions of fuel price increases as a result of an increase in fuel duties or as a result of the introduction of a parallel ETS for road transport. We employed a Serious Game to elicit perceptions. The game was designed to create situations where drivers would need to make decisions in response to an increase in the pump price of fuel. Ultimately, the idea was to get the study participants to reflect on their travel decisions both in the game and in real life.