Carbon Pulse Index

The UK government is looking at how to avoid a disparity in carbon prices in the Irish Sea when it expands its ETS to the domestic maritime sector, according to officials.

European carbon prices slid lower on Tuesday morning as weaker sentiment brought an end to an eight-day rally, with more participants eyeing the possibility of a sell-off as technical signals pointed to an overbought market, while UK Allowances steadied after bouncing back from Monday’s record low.

Global gas markets are expected to remain tight in 2025, the International Energy Agency (IEA) said in its quarterly market report on Tuesday, suggesting upward pressure on carbon prices will remain in regions like the European Union.

This spring, UK Prime Minister Keir Starmer and European Commission president Ursula von der Leyen will meet to discuss UK-EU relations and future areas of cooperation as the new relationship between the two develops. Linking the UK and EU ETS could be on the agenda.

The EU could accept international carbon units in its Carbon Border Adjustment Mechanism (CBAM), ETS, or ETS2 schemes — as long as the credits are of a high enough quality, according to a former top climate official.