European Carbon Market Analysis | EU ETS, EU ETS 2, UK ETS

Decision signals risk and hedging teams monitor

Risk and hedging teams need visibility into the market signals that affect certificate cost exposure, sourcing risk, and future procurement conditions.

Certificate price exposure

Track certificate prices across technologies, vintages, and geographies
Compare GO, REGO, and international EAC pricing developments
Monitor pricing shifts affecting procurement costs and exposure assumptions

Bid-ask spreads and liquidity

Monitor bid-ask spreads across key certificate products
Assess liquidity conditions across compliance periods and vintages
Identify where thin liquidity may affect execution and price confidence

Auction and transaction activity

Track auction prices and volumes by technology
Monitor recent transactions by price, volume, vintage, technology, and geography
Use market activity to benchmark exposure and hedge assumptions

Issuance and cancellations

Monitor certificate issuance and cancellation trends
Assess whether market balance is tightening or loosening
Track changes in certificate availability across markets

Forecast developments

Compare short-, medium-, and long-term market outlooks
Track forecast revisions across technologies, vintages, and countries
Monitor spreads between production years and certificate categories

Policy and disclosure signals

Monitor disclosure rules and cancellation requirements
Track policy developments affecting certificate demand
Assess how market rules influence sourcing risk and demand timing

Why EAC exposure is challenging to manage

EAC exposure is not defined by price alone. Risk teams need to connect market pricing, certificate availability, disclosure frameworks, and future market balance before setting exposure assumptions or hedging strategies.

Pricing signals are fragmented

OTC prices, auctions, trades, and closing prices show different market views
Exposure assumptions depend on comparing multiple pricing and liquidity signals

Liquidity varies across products

Liquidity differs across technologies, vintages, and certificate systems
Thin markets can reduce confidence in observed pricing

Market balance is not visible from price alone

Certificate availability depends on issuance, cancellations, and imports
Future balance must be assessed through supply-demand modelling

Forecast assumptions can shift exposure

Forecast revisions affect expected procurement costs and availability
Vintage spreads can change exposure across future compliance periods

Policy and disclosure rules affect demand timing

Disclosure deadlines influence when certificates are cancelled
Market rules affect eligible certificates and sourcing strategies

Why EAC policy advocacy requires market intelligence

Policy design affects more than compliance language. It can change certificate eligibility, cancellation behaviour, sourcing strategies, liquidity, and long-term market balance.

Policy changes affect demand timing

Disclosure deadlines influence when certificates are cancelled
Reporting requirements affect procurement and sourcing behaviour

Certificate rules affect market access

Eligibility requirements determine which certificates can be used
Recognition rules affect cross-border sourcing and market participation

Market design influences liquidity

Market rules can change available supply and trading activity
Liquidity conditions affect how policy changes are absorbed

Supply-demand impacts are not always immediate

Policy changes can affect market balance over several compliance periods
Long-term impacts depend on generation, cancellations, and demand growth

Country rules differ across certificate systems

National frameworks affect disclosure, cancellation, and recognition
Advocacy positions require comparable market evidence across jurisdictions

Drivers

Tracking short- and long-term market trends to clarify current and potential impacts from disparate drivers

Market behaviour

Analysing participant behaviour and market sentiment while commenting on price drivers. An in-depth focus on industry sectors by understanding their marginal abatement costs and trade behaviour allows for informed decision-making. Our pan-European power market modelling is the backbone for our granular utility-sector insights and hedging strategy analysis

Policy developments

Following relevant European carbon and energy market legislation, providing foresight on political outcomes, and assessing market impacts

Supply & demand forecasts

Generating insights on how policy ambition and regulatory change shape short- and long-term supply dynamics. Addressing sensitivities of key assumptions for EU ETS market participants. Following sector-specific trends, production data, and decarbonisation pathways to track and forecast demand for carbon European Union allowances (EUAs)

Technical analysis

Identifying key trends in the market, spotting relevant support/resistance levels, and technical patterns

Market data

Key market data for the EU ETS and the wider energy complex. Prices, volume, open interest, seasonality charts to assess liquidity, and participant behaviour

Key EAC market drivers risk teams monitor

EAC market risk is shaped by certificate supply, cancellation demand, liquidity, policy frameworks, and long-term renewable electricity demand.

Renewable generation determines certificate issuance volumes

Technology mix affects availability across certificate categories

Weather conditions influence generation and short-term supply

Cancellation activity shows realised certificate demand

Supplier obligations influence demand across compliance periods

Corporate procurement affects voluntary market demand

Issuance and cancellations determine market tightness

Liquidity affects price transparency and execution confidence

Imports and exports influence regional certificate availability

Auction prices and volumes indicate market sentiment

Trade activity shows where market interest is concentrated

Bid-ask spreads reveal liquidity and pricing confidence

Disclosure rules influence cancellation deadlines and demand timing

Market rules affect certificate eligibility and sourcing behaviour

Policy developments shape future market expectations

Electrification may increase renewable electricity demand

Renewable hydrogen production may affect future certificate demand

Decarbonisation pathways shape long-term market balance

How risk and hedging teams use Veyt

Veyt brings EAC pricing, liquidity, market balance, forecasts, and policy analysis into one workflow for managing certificate exposure.

Exposure assessment

Hedging strategy support

Scenario and forecast review

Policy and compliance risk monitoring

Market balance monitoring

Customisable views for different risk workflows

Risk and hedging teams focus on different signals depending on exposure, compliance period, geography, and certificate type.

Risk management teams

Hedging teams

Procurement risk teams

Utilities and suppliers

Quantitative and modelling teams

EAC intelligence platform — At a glance

The Veyt EAC intelligence platform combines market data, forecasts, and analyst interpretation into a single analytical workflow.

Market balance forecasts

Issuance and cancellation outlooks

Long-term market outlooks

Country market analysis

Interactive pricing visuals

Policy and disclosure frameworks

Multi-term market forecasts

Analyst market commentary

What the platform provides

Standard capabilities

Additional capabilities

Who this is for

Additional users

Intelligence platform

Data API

Resources

Newsletter

Industry

Net zero market solutions