EU ETS Carbon Cost Calculator
Estimate your EU Emissions Trading System compliance cost. Emissions × Carbon Price = Total Cost — covering power, industry, aviation, and shipping.
Tonnes of CO2 equivalent for the reporting period
Leave blank for default €85 — or enter latest ICE/EEX price
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What is the EU Emissions Trading System?
The EU Emissions Trading System (EU ETS) is the world's first and largest carbon market. Launched in 2005 under Directive 2003/87/EC, it sets a declining cap on total greenhouse gas emissions from power generation, industry, aviation, and (from 2024) maritime shipping across the EU, EEA, and Northern Ireland (for electricity). The system covers around 10,000 installations and accounts for roughly 40% of the EU's total GHG emissions. By 2023, the EU ETS had helped cut power and industry emissions by approximately 47% compared to 2005.
Installations must surrender one EU Allowance (EUA) — one tonne of CO2 equivalent — for every tonne they emit. EUAs are traded on regulated exchanges — primarily ICE Endex and EEX. Since 2013, the EU ETS has raised over €175 billion in auction revenues for Member States' climate investments.
The EU ETS Cost Formula
Total Cost (€) = Emissions (tCO2e) × EUA Price (€/tCO2e)
Example
Covered Sectors
Power Generation
Electricity generation and district heating. Covers roughly 40% of total EU GHG emissions across all ETS sectors.
Heavy Industry
Iron & steel, cement, lime, glass, ceramics, aluminium, chemicals, oil refineries, pulp & paper, bulk organic chemicals. Also PFCs from aluminium production.
Aviation
Flights within the EEA and departing to Switzerland and UK. Free allocation phased out from 2026. Long-haul flights under CORSIA.
Maritime Shipping (from 2024)
Large ships ≥ 5,000 GT. CO2 initially, CH4 and N2O added from 2026. Phase-in: 40% of 2024 emissions, 70% of 2025, 100% from 2026 onwards.
EU ETS Phases
Phase I
2005–2007
Pilot phase; 100% free allocation; over-allocation caused price to collapse to zero; €40/tonne non-compliance penalty
Phase II
2008–2012
Kyoto Protocol period; aviation added 2012; €100/tonne penalty; economic crisis reduced demand and created large surplus
Phase III
2013–2020
EU-wide cap; auctioning as default; LRF 1.74%/year; backloading 900M allowances; MSR established 2018
Phase IV
2021–2030
LRF 2.2% (2021–2023) → 4.3% (2024–2027) → 4.4% from 2028; target: −62% vs 2005 by 2030; shipping added 2024; aviation free allocation phased out from 2026
EU ETS vs CBAM
EU ETS
Applies to EU-based installations. Caps total emissions and requires EUA surrender. Powers carbon market price signal.
CBAM
Applies to imports of steel, aluminium, cement, fertilizers, electricity, hydrogen. Certificate price = weekly avg EU ETS price.
Use our EU CBAM calculator for import carbon costs.
Official sources & references
- European Commission — EU Emissions Trading System
- EC — Auctioning of Allowances (revenue data, Article 29a indicators, 2026 auction calendars)
- EUR-Lex — Directive 2003/87/EC (EU ETS founding legislation)
- EUR-Lex — Directive (EU) 2023/959 (Fit for 55 ETS revision — Phase IV LRF, free allocation phase-out)
- ICE Endex — EUA Carbon Futures (live prices)
- EEX — EUA Futures & EU ETS Auctions (live prices, 2026 auction calendar)
- ICAP ETS Map 2026 — global carbon market overview & price comparison
EUA Spot (May 29, 2026)
~€80/tCO2e
EEX spot; up 9.3% vs. 1 month ago
2024 Auction Revenue
€38.8B
Single-year record; total since 2013: €230B+
2026 Avg Forecast
~€82/tCO2e
ABN AMRO revised baseline (May 2026)
The EUA price as of 29 May 2026 was ~€79–81/tCO2e (up 14.5% year-on-year), with the Dec 2026 futures contract in the €75–79 range. A mid-term ETS review expected at the July 2026 EU summit — alongside discussion of a possible EU-UK ETS linkage — is driving near-term uncertainty. Six EU member states (Czechia, Bulgaria, Poland, Romania, Greece, Slovakia) have called for relaxing carbon pricing to protect heavy industry, though the European Commission has maintained the system's trajectory.
Sources: EEX spot auction results; European Commission Article 29a indicator (May 2026); ABN AMRO Carbon Market Strategist (May 2026); Trading Economics.
For CBAM-covered sectors (iron/steel, cement, aluminium, fertilizers, electricity, hydrogen), free allocation is reduced via a CBAM factor that rises from 2.5% in 2026 to 100% in 2034. This factor represents the fraction of free allocation removed — the remainder is still granted at no cost. The steepest single-year acceleration is 2029→2030, where the CBAM factor jumps from 22.5% to 48.5% in one step. For aviation, the phase-out is complete: free allocation reached 0% from 2026.
| Year | CBAM Factor | Free Alloc. Remaining | Net Cost — BF-BOF Steel (@€75) |
|---|---|---|---|
| 2025 | 0% | 100% | €0/t |
| 2026 (current) | 2.5% | 97.5% | ~€3.8/t |
| 2027 | 5% | 95% | ~€7.5/t |
| 2028 | 10% | 90% | ~€15/t |
| 2029 | 22.5% | 77.5% | ~€33.8/t |
| 2030 | 48.5% | 51.5% | ~€72.8/t |
| 2031 | 61% | 39% | ~€91.5/t |
| 2032 | 73.5% | 26.5% | ~€110/t |
| 2033 | 86% | 14% | ~€129/t |
| 2034 | 100% | 0% | ~€150/t |
What this means for EU producers: In 2026, the effective incremental carbon cost for BF-BOF steel from the free allocation reduction is only ~€3.8/tonne — modest in year one. But by 2030, the same producer faces ~€72.8/t in net carbon costs, and by 2034, the full ETS cost on 2.0 tCO2e/t at market price (~€150/t at €75/tCO2e). This explains why industry is investing heavily in DRI-EAF (direct reduced iron with electric arc furnaces) as a lower-emission production route.
Source: Article 10a(1a), Directive 2003/87/EC (as revised by Directive (EU) 2023/959); CBAM Guide free allocation analysis; Commission Implementing Regulation (EU) 2021/447.
At ~€79–80/tCO2e, the EU ETS commands the world's highest major compliance carbon price — roughly 5–8× higher than China's and 3× higher than California's. This price gap is the fundamental driver of CBAM: without it, EU producers would be undercut by imports from countries with lower or no carbon pricing.
| Carbon Market | Price (May 2026) | Coverage | Notes |
|---|---|---|---|
| EU ETS | ~€79–80/tCO2e | Power, industry, aviation, shipping | May 2026 spot (EEX). All-time high: €105.73 (Feb 2023) |
| UK ETS | ~€56/tCO2e (£48) | Power, industry, aviation | EU-UK linking discussions ongoing; summit expected July 2026 |
| Germany nETS | Min. €55/tCO2e | Buildings, transport (non-EU ETS sectors) | Transitioned to price corridor in 2026; min. floor €55/t |
| California CCI | ~€28/tCO2e ($30) | Power, industry, transport | Western Climate Initiative; CA + Quebec linked |
| South Korea K-ETS | ~€15–25/tCO2e | Industry, power (~73% of GHG) | Top CBAM Article 9 candidate; Commission recognition pending |
| China CN-ETS | ~€10–15/tCO2e | Electricity sector only | Intensity-based; steel sector excluded; does not qualify for CBAM Art. 9 |
| Canada OBPS | ~€55/tCO2e (CAD 80) | Large final emitters | Output-Based Pricing System; federal federal carbon charge |
EU-UK ETS Linking (potential 2028)
An EU-UK summit expected in July 2026 may advance discussions on linking the EU and UK ETS. Linking would narrow the current ~€24/t price gap and simplify cross-border compliance for UK exporters to the EU (reducing their CBAM exposure indirectly).
ETS2 — Buildings & Transport (2027)
EU ETS 2 (covering buildings, road transport and additional sectors) was delayed one year by the revised European Climate Law (March 2026). It now launches in 2027, with a price corridor and the Social Climate Fund (€86.7B, 2026–2032) funded by ETS2 revenues.
Sources: EEX/ICE spot prices (May 2026); ABN AMRO Carbon Market Strategist; Brannvoll ApS; ICAP ETS Map 2026; EC Climate Action; GMK Center.
Frequently Asked Questions
€85
Default / mid-range (per tCO2e)
Prices fluctuate daily. Check ICE or EEX for live data.