Addressing political and economic shifts in the European carbon market

Carbon allowances reached their highest price on record in January 2026. Hedge funds and speculative investors are entering European Union carbon markets, betting on this increasing further. While this trend incentivises decarbonisation, Independent Commodity Intelligence Services predicts that the number of permits is set to fall by 15% in 2026. Limited supply and increasing prices could lead to businesses putting pressure on policy-makers to change current pricing and trading schemes.

This roundtable discusses carbon markets and EU allowances as a means of incentivising decarbonisation and asks whether the market should be strengthened or paused entirely. It brings together public and private institutions to discuss the future of the European carbon market and examine how best to address fluctuations in carbon allowances and the EU Emissions Trading System.