EMISSIONS: Weekly News Highlights MNI Power Service Part 2/2 Week 48

See below the weekly news highlights of the MNI Power Service for the week 24 - 28 November.

EMISSIONS

•  A total of 16.8mn EUAs will be auctioned next week across four auction sessions.
• Investment funds slightly reduced net long positions in EU ETS futures on the ICE exchange after three consecutive weeks of increases.
• Investment funds reduce their net long positions in UK ETS futures on the ICE exchange as of 21 November.
• The EU Commission has proposed to double allowance injections through the MSR until 2029 if the EU ETS 2 price exceeds €45/t, potentially releasing up to 80mn allowances annually.
• EUAs and UKAs Dec25 fell by as much as 0.43% and 0.47%, respectively, following reports that Ukraine had agreed with US on a peace deal. However, both carbon contracts quickly rebounded from intraday lows.
• S&P Global expects EUAs to average €85/tCO2e in 2026, implying a 4.7% upside from current levels, driven by tightening supply and declining free allocation.
• ICIS expects EUAs to reach €100/tCO2e in Q1 2026, implying a 23% upside from current levels, driven by forecasted deficits, tightening supply and exhausted fuel-switching options.
• BNEF expects the total EU ETS supply to be reduced by 26% between 2025-2030 amid tightening free allocation and auction volume.
• BNEF forecasts that the EU carbon market in 2026 will reach the highest deficit since 2022 at 217mn allowances, compared with the 36.5mn this year.
• The main COP30 outcomes on emissions include a collective acknowledgment that the 1.5°C target will be exceeded without additional action. Leaders also agreed to discuss a fossil-fuel transition roadmap at the “Transitioning Away from Fossil Fuels” conference scheduled for 28–29 April 2026 in Santa Marta. In addition, 122 out of 193 nations have submitted their updated pledges.
• The UK ETS Authority has confirmed that the maritime sector will be integrated into the UK ETS on 1 January 2027, with the first surrender deadline on 30 April 2028 covering emissions from 1 July 2026 to 31 December 2027.
• The UK ETS will phase out free allocation over a nine-year period starting in 2027 and will adopt EU benchmark values for the free allocation calculation for 2028-2030.
• LSEG expects that the EU Commission’s proposal of EU ETS revision to be released in late September 2026 and the revised rules to enter into force in June 2028.
• Germany has approved legislation enabling large-scale CO₂ storage, which the Federal Economics Ministry described as a critical enabler for hard-to-abate sectors such as cement, lime and aluminum.
• Industry stakeholders of the automotive sector have been cautioned that there may be a delay to the review of the EU’s combustion engine ban for 2035, currently scheduled to take place on 10 December.
• The German coalition government during a meeting on Thursday evening agreed on a common stance on the planned 2035 new combustion engine sales ban and plans to push the European Commission to update its vehicle-fleet emissions rules.