The European Union’s carbon market has recently experienced a significant downturn, with carbon prices hitting a 28-month low. This decline is due to various factors including macroeconomic uncertainties and decreased volatility in global gas and power markets.
Amidst this market turmoil, the EU has unveiled a bold new climate target, aiming to slash greenhouse gas (GHG) emissions by 90% by 2040. Despite initial optimism, analysts predict further bearish trends as economic headwinds persist.
Carbon Crunch: EU’s Carbon Market Saga
The EU carbon prices recently hit a 28-month low, trading at Euros 56.5 per mtCO2e ($60.5/mtCO2e) on Feb. 14, according to data from the Intercontinental Exchange. Comparatively, EU Allowances (EUAs) were at a record high of over Euros 100/mtCO2e around the same time last year.
- READ MORE: EU Carbon Prices Surge to 100 Euros
However, since the 4th quarter of 2023, prices have been on a notable downward trajectory. Analysts attributed that trend to macroeconomic uncertainties, political challenges, and decreased volatility in the global gas and power markets.
The recent weakness in the European carbon market was evident in the EU daily carbon auction, where both prices and demand experienced sharp declines. As shown below, the cleared price for the EUA auction at 56.24 Euros or US$58.45/mtCO2e was the lowest price since Q3 2021.
Traders and analysts anticipate the bearish trend in the EU carbon complex to persist as the region anticipates further economic headwinds in the coming months.
Moreover, a veteran hedge fund investor sees a further slump in European Union carbon permits on the horizon as energy supplies soar and demand remains subdued. Per Lekander, CEO of London-based Clean Energy Transition, said that a flood of renewable power, alongside falling gas prices and a recovery in nuclear and hydro plants will keep the pressure on carbon prices.
Prices have already slumped 30% this year as that combination curbs pollution that’s the basis for demand to buy emissions permits in Europe.
Analysis by S&P Global expects average prices for 2024 to plummet to Eur 63.90/mtCO2e, compared to Eur 85.30/mtCO2e in 2023 and Eur 81.50/mtCO2e in 2022.
Thus, many have revised down their EUA 2024 price forecasts. They attribute the decline to recession concerns and reduced emissions from power and industrial sectors.
EU’s Bold Climate Agenda for 2040
The European Commission unveiled a bold new climate target, setting its sights on slashing the bloc’s GHG emissions by 90% by 2040, relative to 1990 levels.
This ambitious target closely aligns with the recommendations put forth by the European Scientific Advisory Board on Climate Change. The organization advises a reduction of emissions by 90% to 95%.
More notably, this intermediary step serves as a crucial bridge between the EU’s current objectives:
- Cutting net emissions by 55% by 2030 and achieving net zero emissions by 2050.
The analysis conducted in the impact assessment of the new proposal indicates that the remaining EU GHG emissions in 2040 should not exceed 850 million metric tons of CO2-equivalent (MtCO2-eq). Meanwhile, carbon removals, facilitated through land-based and industrial carbon removal methods, should aim to reach up to 400 MtCO2.
Achieving this new climate agenda requires a couple of initiatives, including:
- a significant shift towards renewable energy systems,
- phasing out coal-fueled power generation and reducing overall fossil fuel usage by 80%,
- and a substantial reduction in gas dependency within the EU’s energy infrastructure.
It also calls for major transformations in various sectors such as transportation, agriculture, construction, manufacturing, and waste management.
This ambitious target is essential to ensure the EU remains aligned with the objectives outlined in the 2015 Paris Agreement. The agreement aims to limit the planet’s long-term average temperature increase to well below 2°C and preferably below 1.5°C.
From Downturn to Turnaround
Moreover, the proposal underscores the economic imperative of addressing climate change, highlighting the potential costs of inaction. Failure to limit global warming to 1.5 degrees Celsius above pre-industrial levels could result in additional costs of 2.4 trillion euros in the EU by 2050, primarily due to the heightened risk of more severe and destructive extreme weather events.
In 2022, the EU made significant strides in reducing GHG emissions, achieving a 33% reduction compared to 1990 levels.
EU CO2 Emissions, 1965-2022
Additionally, a separate EU document outlines plans to capture and store hundreds of millions of tons of CO2 emissions by 2050, emphasizing the substantial investment required in new technologies to address climate challenges effectively.
However, it’s important to note that the 2040 ambition is currently a non-binding recommendation from the European Commission, intended to initiate political discussions. A formal proposal will only be presented after the elections to the European Parliament.
It remains uncertain how the final decision would impact the European carbon market and prices. Regardless, the EC’s ambitious 2040 climate target underscores the EU’s commitment to addressing climate change and ensuring a sustainable future.
However, it remains imperative for policymakers to translate these goals into concrete actions to mitigate the potential costs of inaction.
The post EU Carbon Prices at 28-Month Low Amid New 2040 Climate Goal appeared first on Carbon Credits.
The uranium price has continued its upward trajectory this week, climbing to 85.67 USD. This represents a solid 2.19% gain over the last seven days and extends the year-to-date performance to a 5.09% increase. After a period of consolidation, the market is witnessing renewed momentum driven by the converging forces of a widening supply deficit and escalating energy demands from the technology sector.
Uranium Price
Market Drivers for the Uranium Price
The primary catalyst behind the recent movement is the intensifying focus on nuclear energy as a critical solution for powering artificial intelligence (AI) infrastructure. As data centers expand globally, tech giants are increasingly seeking reliable, carbon-free baseload power, prompting a reassessment of long-term demand. Recent reports indicate that major utilities are accelerating their contracting cycles to secure fuel inventory, anticipating a squeeze as new reactors come online in Asia and dormant facilities restart in Japan.
On the supply side, geopolitical friction continues to tighten the market. Persistent restrictions on Russian nuclear fuel imports have forced Western utilities to pivot toward alternative suppliers, creating bottlenecks in conversion and enrichment services. Additionally, recent activity from physical funds—most notably a reported purchase of 100,000 pounds of yellowcake by Sprott—has removed spot inventory, adding immediate upward pressure to the uranium price.
Technical Outlook
Technically, uranium has firmly established support above the psychological $80 level. The breakout above $85 signals bullish sentiment, with analysts eyeing the $90 mark as the next key resistance zone. The 30-day movement of 8.27% suggests that buyers are stepping in aggressively on dips, reinforcing a strong uptrend. If the price can sustain a close above $86, it may open the door for a retest of the cyclical highs seen in previous years. However, investors should remain attentive to upcoming production reports from major miners like Kazatomprom and Cameco, which could introduce short-term volatility.
The post Uranium Price Today: AI Power Demand and Supply Deficits Fuel Rally appeared first on Carbon Credits.
The Lithium Price surged to a fresh two-year high today, closing at 170,999.81 CNY per tonne. This marks a significant 7.55% gain over the last seven days and extends a powerful year-to-date rally of 44.38%. After a prolonged period of consolidation, the battery metal has broken critical resistance levels, driven by a convergence of aggressive policy shifts in China and renewed supply constraints.
Lithium Price
Market Drivers for the Lithium Price Rally
The primary catalyst for this week’s 7.55% move is the sudden tightening of supply in China’s Jiangxi province. Authorities have canceled 27 mining permits in the hub as part of an environmental "anti-involution" campaign, effectively removing significant feedstock from the market. This supply shock coincided with Beijing’s announcement that export tax rebates for battery products will be cut from 9% to 6% starting in April. This policy shift has triggered a massive "front-running" effect, with manufacturers rushing to secure raw materials and export finished goods before the deadline.
Adding fuel to the fire, industry giant CATL reportedly placed a massive $17.2 billion order for cathode materials earlier this week. This demand signal has forced downstream players to cover spot positions aggressively, exacerbating the squeeze created by the Jiangxi permit cancellations.
Technical Outlook
Technically, the Lithium Price has staged a decisive breakout above the psychological 170,000 CNY level. The 30-day movement of 71.86% suggests the market is in a steep markup phase, fueled by short covering and panic buying. Momentum indicators are currently in overbought territory, but the fundamental supply deficits suggest support remains strong at the 155,000 CNY breakout zone. If the rally sustains, the next key resistance target lies near 200,000 CNY, a level not seen since the market began its correction two years ago.
The post Lithium Price Today: China’s Supply Crackdown and Tax Overhaul Fuel 7% Rally appeared first on Carbon Credits.
The Lithium price continued its explosive start to 2026, surging to 170,999.81 CNY per tonne on Friday. The battery metal has posted a remarkable 7.55% gain over the last seven days alone, extending a massive 71.86% rally over the past month. Year-to-date, lithium prices are up 44.38%, marking a definitive reversal from the surpluses that plagued the market in previous years.
Lithium Price
Market Drivers
Two primary factors are fueling the current rally: a surge in utility-scale energy storage demand and sudden supply constraints in China’s mining hubs.
- Energy Storage Demand Spike: While EV sales remain steady, the demand for lithium iron phosphate (LFP) batteries in energy storage systems (ESS) has outperformed expectations. Analysts forecast a 55% growth in ESS installations for 2026, driven by Beijing’s mandate to double EV charging capacity and grid storage infrastructure by 2027.
- Jiangxi Supply Crunch: On the supply side, Chinese authorities recently canceled 27 mining permits in the lithium hub of Jiangxi as part of an environmental crackdown. This follows the suspension of operations at CATL’s Jianxiawo mine, effectively removing significant monthly tonnage from the market just as downstream battery makers rush to restock ahead of reduced export rebates.
Technical Outlook
Technically, the Lithium price has decisively broken through the psychological resistance level of 150,000 CNY. The steep vertical ascent suggests intense buying pressure, likely exacerbated by short covering from traders who were positioned for a surplus. With the price now firmly establishing support above 160,000 CNY, market participants are eyeing the 200,000 CNY level as the next major target. However, the Relative Strength Index (RSI) indicates the metal is in overbought territory, suggesting potential volatility in the short term as the market digests these rapid gains.
The post Lithium Price Today: Energy Storage Boom and Supply Cuts Ignite 71% Rally appeared first on Carbon Credits.
Uranium Price Today: AI Power Demand and Supply Deficits Fuel Rally
Lithium Price Today: China’s Supply Crackdown and Tax Overhaul Fuel 7% Rally
Lithium Price Today: Energy Storage Boom and Supply Cuts Ignite 71% Rally
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