Carbon prices in Europe rose significantly in late 2025, reaching €83.79 per tonne on 15 December, a monthly increase of 3.1% and a year-on-year increase of 30%. The price of carbon allowances in the EU's main scheme The EU Emissions Trading System (EU ETS) has recently reached multi-month highs as companies prepare for compliance deadlines and markets react to tougher policy signals.

Carbon price benchmarks In the EU, prices are testing higher levels, reflecting increased market demand and confidence in tightening emissions caps. This is down from the record highs of more than €100 per tonne seen in 2023. However, prices have sent strong policy signals to reduce greenhouse gas emissions.

System EU ETS sets a limit on emissions from sectors such as power generation and heavy industry. Companies can trade allowances to meet their needs. As the cap is gradually reduced, the number of permits available decreases, which increases prices. This system encourages companies to reduce emissions in a cost-effective way and supports the EU's climate goals.

In 2023, auctioned allowances in the EU ETS generated record EUR 783 billion , making it the world's largest carbon market in terms of turnover. (More on carboncredits.com)