Presently, the EU’s ETS makes up 87% of the global carbon market with a value of approximately €770bn. Reflecting 2022 volumes, roughly 12.5 billion metric tons of carbon permits were traded in 2023. Highs in the European and North American markets, however, reportedly gave 2023 that 2% push.
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Based on a Reuters report, carbon permits in the EU’s ETS were priced at more than €100 early in 2023. This momentum weakened towards the end of the year as demand from industrial buyers and the energy sector dipped. This bearish pattern crossed the 2024 threshold.
In its 2023 carbon market review, LSEG noted:
Economic growth is likely to remain sluggish in the near term across Europe and is expected to lead to further demand destruction from many of the industrial sectors covered by the EU ETS.
Based on this report, the UK’s ETS declined by 22%, with prices hovering around the €65 per ton mark. North America experienced highs in the Western Climate Initiative at $39 per ton and the Regional Greenhouse Gas Initiative at more than $15 per ton. China’s national ETS also achieved a high of CNY80.51 in October 2023. North American markets achieved a combined value of €71.4bn and the Chinese market attained €2.3bn.
