Mild Winter and Rising Renewables Lead to Unexpected Drop in EU Carbon Prices

Source: Trading Economics

EU carbon prices have dipped below €65 due to a combination of improving weather conditions, a slowdown in the manufacturing industry, falling natural gas prices, and an unusually hot winter. These factors, alongside increased renewable energy production and the decoupling of GDP growth from CO2 emissions in major economies, suggest a temporary shift in the carbon market despite ongoing efforts to accelerate the green energy transition.