In the market for emission allowances, the weak supply and demand situation puts downward pressure on the price. Over the past two years, additional allowances have been auctioned to finance the REPowerEU programme, which has increased supply and thus curbed the price. Additional EU ETS allowances will also enter the market in 2025 and 2026. On the demand side, growth in renewable electricity generation and still relatively low industrial production are contributing to the negative sentiment in the EU ETS market. Should sharp price increases in the gas market fail to materialise this winter, this situation will not change in the short to medium term. The low EU ETS price in September and October so far has made the activation of the national CO2 levy all but certain, bringing an additional cost of about EUR 20 per purchased CO2 allowance into the picture for Netherlands-based industry.
The active monthly Dutch electricity price contract has increased by 20% over the past month. As a result, the monthly contract is currently above the active annual contract. This is largely seasonal, although geopolitics also plays a role. An analysis of the IEA’s World Energy Outlook 2024 shows that ever-increasing electrification comes with major challenges worldwide. Following that, an analysis shows that electricity supply prices will be affected in the short term and in the long term by the growing share of battery capacity in the Netherlands.