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EU Carbon Market Deficit to Narrow in 2023/2024

EMISSIONS

The European carbon market deficit is estimated at 50-100 million tons in 2023/24, compared with above 300 million tons in 2022 (see chart) according to Bloomberg Intelligence.

  • The legislated cap on European emissions is about 1.45 billion tons in 2024, however, this falls to around 1.1 billion when accounting for MSR and other supply adjustments.
  • On the demand side, emissions growth is expected to slow this year, limiting demand for carbon allowances, according to BI.

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