Carbon price faces volatility
Unclear regulatory and energy outlooks cloud the EU ETS carbon market picture
The outlook for the price of CO2 in the European emission trading scheme (EU ETS) in 2020 could fairly be described as “mixed”. The market faces a variety of both bullish and bearish influences over the next twelve months that could see prices move in a fairly wide range. In 2019, EU carbon allowances (EUAs) consolidated in the mid-€20s/t after a 200pc rise the previous year (see Figure 1). The influences that drove that trebling in price—in particular, new measures to curb oversupply—are still present, but much of the speculative buying from investors that drove the year-long rally was unwound in 2019, and, at the start of the new decade, those investors are circling the market and waiting

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