In May, carbon prices in the European Union rose by 7%, driven by volatile gas prices, shifting global trade dynamics, and news of a potential merger between the EU and UK Emissions Trading Systems (ETS).
As reported by GMK Center, prices climbed from $76.2/t (€67.0/t) to $81.5/t (€71.6/t). Initially, prices were stable but surged around May 15.
The benchmark December 2025 EUA contract, traded on ICE, peaked mid-month at $83.5/t (€73.4/t) before settling slightly lower.
UK carbon prices, meanwhile, dipped to a two-week low ahead of the EU summit but briefly rebounded after May 19, when the EU and UK announced plans to work on integrating their ETS mechanisms.
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The price of EU allowances (EUA) jumped to $83.326/t (€73.18/t) on May 20 but then declined slightly to $81.42/t (€71.56/t) following U.S. trade policy concerns, particularly former President Donald Trump’s announcement of a potential 50% tariff on EU imports.
By the end of the month, on May 29, the December 2025 EUA contract traded at $80.71/t (€70.94/t).
In the UK, the same contract rose from $70.88/t (£52.43/t) on May 19 to $74.39/t (£55/t) the next day, before easing.
Analysts at S&P Global expect UK carbon prices to stabilize around $67/t (£50/t) in Q3.
On May 6, ICE introduced new futures for the upcoming ETS2, which will extend the EU carbon market to cover buildings and road transport starting in 2027.
The first ETS2 contracts traded at $83.67/t (€73.57/t). Additional trading will begin on the European Energy Exchange (EEX) in July.
The EU-UK ETS integration agreement, announced May 19, aims to ease post-Brexit trade by potentially exempting goods from Carbon Border Adjustment Mechanism (CBAM) obligations and aligning climate policies across key sectors like electricity, transport, and heavy industry.
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