EU
The European Union Allowance (EUA) prices for November averaged at EUR 67.15 per tonne, up 5% from the previous month. EUA prices rebounded from the declines observed in the prior two months, peaking at EUR 70.6 per tonne near the end of November. This upward trend can be attributed to a stabilization in the energy market, improved market sentiment, the imminent implementation of shipping emission regulations, and a recovery in European manufacturing. Despite increased market supply, strong demand quickly offset this impact. However, a stable auction schedule and uncertainty in policy details have constrained further price growth.
Looking ahead to December, market volatility may persist, driven by year-end compliance demand. If winter brings severe cold, boosting natural gas demand, EUA prices could surpass the EUR 70 threshold, setting the stage for market developments in 2025.
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China
The China Emission Allowance (CEA) prices for November averaged at RMB 104.96 per tonne, up 1.81% from the previous month. CEA prices reached a new high of RMB 105.65 during the month, reflecting strong market demand, albeit with slower growth compared to previous months. Key drivers of this price increase included early procurement by enterprises and reluctance among allowance holders to sell.
On the supply-demand front, a surge in demand from the power sector improved market liquidity, though supply remained constrained. Additionally, strengthened government support and regulatory oversight of the carbon market contributed to steady price growth. As the compliance deadline approaches and with expectations of reduced free allowances, CEA prices are likely to remain robust. However, with some sectors having completed their advance purchases, trading volumes may temporarily ease, although the overall price trajectory remains upward.