Modeling projects carbon prices could surge to €470 per tonne by 2040 under EU's planned ETS reforms
Polish research organization KOBiZE projects that carbon prices could escalate to €470 per tonne by 2040 if the European Commission's proposed reforms to the Emissions Trading System are implemented as outlined. The modeling analysis reflects the expected tightening of carbon supply and increased climate ambition embedded in the Commission's package of amendments. These projections suggest significant cost implications for carbon-intensive industries across the EU in coming years.
The European Commission has proposed a package of amendments to the EU's Emissions Trading System designed to strengthen climate objectives through supply-side mechanisms. The Polish National Centre for Emissions Management conducted modeling analysis to assess potential market outcomes under these reformed parameters, focusing specifically on the trajectory of marginal abatement costs through 2040. The projections underscore how structural changes to the ETS framework—particularly measures that constrain carbon allowance availability—may translate into substantially higher compliance expenses for regulated entities.
The projected price trajectory could significantly affect investment decisions across carbon-intensive sectors including steel, cement, chemicals, and power generation. Higher carbon costs may accelerate industrial decarbonization efforts and shift competitive dynamics toward lower-emission producers, potentially encouraging both technological innovation and relocation of production. However, elevated compliance costs could also influence energy prices for consumers and competitiveness of EU industries relative to regions with less stringent climate policies, creating pressure for complementary trade or support mechanisms.