Soaring Carbon Prices: The Lure of Short-Term Markets
The world’s largest mandatory carbon market, the EU Emissions Trading System (EU ETS), has seen a sharp rebound in the price of EU carbon permits—commonly known as carbon credits. After dropping below €61 per ton in the second week of April, prices have surged in recent weeks, breaking out of the consolidation range seen in May and recently surpassing €75 per ton—a new short-term high. That’s a nearly 25% increase in just two months, with both year-on-year (YoY) growth over 10% and month-on-month (MoM) growth nearing 5%. Some market participants are now eyeing the €84 level set at the start of the year. Optimism is running high, echoing the bullish sentiment seen during the early years of the Biden administration.
So, are carbon credit prices set to soar again? In reality, over the past year, the carbon market has been shaped by broader economic downturns, rising energy costs in Europe, geopolitical uncertainties, and shifting U.S. policies. Unlike the clear upward trend seen in previous years, the current rally lacks a solid analytical foundation to support its sustainability.
While global carbon regulations and carbon pricing mechanisms—such as taxes and trading systems—are becoming more sophisticated, many countries, corporations, and even international supply chains are quietly retreating from their earlier commitments, particularly in the finance and energy sectors. This retreat has contributed to growing polarization among countries with different economic capacities in their approach to carbon governance.
Coupled with rising geopolitical tensions and fragmented approaches to climate resilience and public welfare, the road ahead appears increasingly unfavorable to global cooperation.
Shaky Pledges, Speculative Surge: The Carbon Market’s Value at Risk
Over the past year, warning signs have emerged: growing resistance to RE100, major investors gradually exiting the Net Zero Asset Managers (NZAM) initiative, the quiet resignation of the SBTi chair, and the rise of anti-ESG narratives. These developments are echoed in the volatility of carbon prices, which seem increasingly driven by short-term events rather than long-term fundamentals.
Price movements are beginning to show signs of speculation—raising concerns among carbon project developers, investors, and futures traders. Some are flipping credits for quick gains; others are waiting cautiously on the sidelines. While governments may remain focused on mandatory decarbonization targets, and energy sectors enjoy long-term policy support, large-scale decarbonization technologies outside this realm are finding it harder to secure financing—especially compared to the investment enthusiasm seen just 18 months ago.
This raises a critical question: Is the current carbon price surge truly supported by market fundamentals? Or are we approaching the final leg of a rally that may soon lose steam?
The Resilience of Sustainability: Hope and Progress Amid Challenges
Of course, humanity cannot afford to be pessimistic. Climate change has never been easy to confront, and managing it through carbon markets is no simple task. But the value and mission of sustainability must not be delayed—it requires long-term vision, not short-term convenience. This is not a matter of difficulty, but of duty and responsibility.
Now that the 1.5°C threshold has been breached, investing in adaptive technologies to mitigate climate disasters has become more urgent than ever. Yes, persistent issues like greenwashing, speculation, politically motivated delays (e.g., CBAM implementation or CORSIA’s SAF requirements), and frequent confusion around international carbon credit certifications all show that the road ahead remains rough.
Yet we must believe that most people are still learning, trying, and haven’t given up. We’re seeing the rise of marine conservation, large-scale blue carbon projects, more scientific biodiversity management, next-gen materials with lower costs and higher performance, and energy-efficient innovations pushing boundaries.
Even though carbon pricing and volume may remain volatile in the short to mid-term, we believe the market will continue to evolve. Better regulations, stronger incentives, and increased efficiency will gradually generate a healthier price-volume dynamic—where carbon costs become a natural part of our goals, not just a tradable allowance.
We believe humanity will eventually discover the conditions for reconciliation with nature—finding shared purpose in sustainability, before it’s too late.
Author
Stanley, 洪誠孝
Chief Sustainability Officer of Wonder Greener
Sustainability Committee Member of Taiwan Art Gallery Association
Consulting Expert of Energy and Environment Research Center, National Tsing Hua University
