COP31: EU ETS Architect Delbeke Sees €100/mt as Limit for Carbon Price

ANTALYA, Turkey – A carbon price of up to €100 ($110.88/mt)/metric ton is acceptable for the EU Emissions Trading System, but prices much higher could harm political support for the market, EU carbon market architect Jos Delbeke told OPIS on Tuesday at the COP31 climate talks in Antalya, Turkey.

“We should probably not dream of carbon prices … of hundreds of euros by 2035, 2040,” said Delbeke, who worked in the climate division of the European Commission for over 30 years and currently teaches climate policy and economics at the European University Institute. “That could do harm to the political process,” he added.

This contrasts sharply with most carbon analysts’ forecasts for 2035.

He said he has no price target, but that the current level encourages clean investment, raises revenue and keeps carbon leakage concerns manageable.

“It’s a good price as long as we are not crossing the €100,” he said. In a May interview, Delbeke told Dow Jones Energy that the EU carbon price around €75/mt back then was “fair”.

EU carbon allowance (EUA) prices reached a near ten-month high of €90.525/mt on Nov. 4 before falling below the key €90/mt resistance level, OPIS data showed. The most recent OPIS-assessed benchmark December 2026 EUA price is just above this level, at €90.100/mt, having gained more than €3/mt in the past three sessions.

Central Carbon Bank

Delbeke expressed reservations about an independent European Central Carbon Bank, an idea floated at a COP31 side event on Monday.

At the event, the European Roundtable on Climate Change and Sustainable Transition (ERCST) called for the EU to commit within 18 months to developing a body that could intervene in the carbon market when needed.

However, creating such a body would likely require changing the Lisbon Treaty, which could take a decade, according to Delbeke. A treaty change would be unlikely just for climate action alone, he said.

Delbeke emphasized that the EU does not manage the price directly but manages the liquidity that determines it, through the linear reduction factor (LRF), the Market Stability Reserve (MSR) and Article 29a, the safeguard for price spikes, he said. All three are open for negotiation in the ETS review, with a Parliament vote due in December.

“I would ask the question, what did not work out well at this point in time? What would be the strong argument to make a move to … a European Central Carbon Bank?” Delbeke said.

The LRF, which sets the annual decline in the emissions cap, is the most important variable, he said. He declined to name a figure but said the Commission’s two-step approach is possibly a good model.

The LRF currently cuts the cap by 4.3% each year and is due to reach 4.4% in 2028. Under the Commission’s July 17 proposal, it would slow to 3.7% from 2031 and to 1.7% annually from 2036.

Delbeke said he hopes conditionality on free allocation–proposed by the Commission–will remain. He noted that free allowances already carry some conditions and that tying them to investment and emission cuts is a good proposition, even though the Commission’s overhaul has surprised many people.

International credits within EU ETS

At a COP31 panel on international credits, Delbeke said the EU’s cap of up to 5% on credits is also in place in China, but China uses them for ETS compliance while the EU has yet to decide.

That question is part of the ETS reform, following the proposal of the European Commission published this summer. In it, the EU executive body proposes allowing 260 million “high-integrity” international credits, with the Commission buying them in bulk.

“If the chance is not taken now with Article 6 to develop a carbon credit market, it’s going to be game over for the future,” Delbeke said. High integrity is essential, he said, because money flowing out of the EU to other countries is becoming a political argument in itself. Partnerships with selling countries could give the flow of credits a “diplomatic umbrella,” he added.

“The auditing and the verification needs to be done by independent players. Otherwise, this conflict of interest is always likely to undermine the organization of the new international carbon credits,” he said.

An EU policy paper presented by Simone Borghesi, director of the Florence School of Regulation, Climate, argued that the 5% allowance could cover around 14% of the reductions needed in 2030-2040 and up to 36% after 2036, and recommended buying credits centrally at EU level, as a last resort.

The 2026 United Nations Climate Change Conference, COP31, runs from Nov. 9 to Nov. 20 in Antalya, Turkey.

Reporting by Nia Simeonova, nsimeonova@opisnet.com; Editing by Rob Sheridan, rsheridan@opisnet.com