The European Securities and Markets Authority reports a surge in EU carbon market value to €777 billion in 2025, driven by strong trading activity despite volatility and regulatory challenges.
EU carbon markets expanded to €777 billion in 2025, with the European Securities and Markets Authority saying the rise was driven by brisk trading and firmer prices. In its third annual market report, ESMA said investment firms and credit institutions handled about 62% of trading volumes, underlining the role of financial intermediaries in providing liquidity and helping compliance buyers manage price risk. (esma.europa.eu)
The regulator said the market remained broadly resilient despite a sharp turn in early 2026, when prices fell 29% over three months and volatility hit a two-year peak amid shifting expectations over future EU emissions trading rules, energy costs and wider market conditions. ESMA said it had not identified major concerns over transparency or market integrity, while the annual average price of EU emission allowances rose 13% from 2024 and auction revenues increased 11%, even though fewer allowances were sold. (esma.europa.eu)
The report also pointed to a continuing weakness in the availability of Legal Entity Identifiers in the Union Registry and called for LEIs to be made mandatory for all trading accounts, including under the forthcoming ETS2 scheme. The findings come after the European Commission said in December that the EU emissions trading system remained effective and well-functioning, with power- and industry-related emissions about 50% below 2005 levels and maritime transport now included in the scheme. (esma.europa.eu)
- https://www.urdupoint.com/en/middle-east/eu-carbon-markets-rose-to-777-billion-in-2-2217384.html – Please view link – unable to able to access data
- https://www.esma.europa.eu/press-news/esma-news/financial-firms-keep-eu-carbon-markets-moving – The European Securities and Markets Authority (ESMA) has published its third annual market report on EU carbon markets, highlighting that financial intermediaries are central to the functioning of the EU carbon market. Investment firms and credit institutions accounted for around 62% of overall trading volumes in 2025. The EU carbon market reached €777 billion in 2025, supported by strong trading activity and higher prices. Despite a 29% price decline over three months in early 2026, the market remains resilient, with no major concerns identified regarding transparency or market integrity. ESMA recommends making Legal Entity Identifiers (LEIs) mandatory for all trading accounts, including for the upcoming ETS2. ([esma.europa.eu](https://www.esma.europa.eu/press-news/esma-news/financial-firms-keep-eu-carbon-markets-moving?utm_source=openai))
- https://www.esma.europa.eu/document/market-report-eu-carbon-markets-2025 – ESMA’s 2025 report on EU carbon markets provides detailed insights into the market’s performance, including trading volumes, price dynamics, and the role of financial intermediaries. The report highlights that investment firms and credit institutions accounted for around 62% of overall trading volumes in 2025, underscoring their significant role in providing liquidity and managing price risk. The EU carbon market reached €777 billion in 2025, supported by strong trading activity and higher prices. Despite a 29% price decline over three months in early 2026, the market remains resilient, with no major concerns identified regarding transparency or market integrity. ESMA recommends making Legal Entity Identifiers (LEIs) mandatory for all trading accounts, including for the upcoming ETS2. ([esma.europa.eu](https://www.esma.europa.eu/document/market-report-eu-carbon-markets-2025?utm_source=openai))
- https://www.esma.europa.eu/press-news/esma-news/esma-finds-eu-carbon-markets-functioning-smoothly-new-report – ESMA’s annual market report on EU carbon markets for 2024 indicates that the market is functioning smoothly, with no significant issues identified in integrity or transparency. The report notes that emission allowance auctions and secondary market trading dynamics remain largely unchanged, facilitating the flow of allowances from financial intermediaries to non-financial firms with compliance obligations. The analysis highlights that the market accommodates different acquisition strategies, reflecting the diverse needs and capabilities of participants. ([esma.europa.eu](https://www.esma.europa.eu/press-news/esma-news/esma-finds-eu-carbon-markets-functioning-smoothly-new-report?utm_source=openai))
- https://www.esma.europa.eu/press-news/esma-news/esma-publishes-its-first-annual-report-eu-carbon-markets – ESMA has published its first annual report on EU carbon markets, providing details and insights into the functioning of the EU Emissions Trading System (EU ETS) market. The report covers key findings such as the decline in prices and volatility since the beginning of 2023, attributed to lower demand for emission allowances, falling natural gas prices, and increased supply due to additional allowances auctioned to finance the REPowerEU plan. It also highlights the concentration of emission allowance auctions, with 10 participants buying 90% of auctioned volumes, and the predominance of derivatives in secondary market trading. ([esma.europa.eu](https://www.esma.europa.eu/press-news/esma-news/esma-publishes-its-first-annual-report-eu-carbon-markets?utm_source=openai))
- https://cms.law/en/int/regulatory-news/esma-eu-carbon-markets – CMS Law provides an overview of ESMA’s annual market report on EU carbon markets, covering developments in the primary and secondary markets for EU emission allowances in 2024. The report notes that ESMA has not identified any significant issues in the integrity or transparency of EU carbon markets. It also highlights the concentration of emission allowance auctions, with 10 participants buying 90% of auctioned volumes, and the predominance of derivatives in secondary market trading. ([cms.law](https://cms.law/en/int/regulatory-news/esma-eu-carbon-markets?utm_source=openai))
- https://climate.ec.europa.eu/news-other-reads/news/2025-carbon-market-report-eu-ets-lowers-power-sector-emissions-and-expands-maritime-transport-2025-12-03_en – The European Commission’s 2025 Carbon Market Report demonstrates how the EU Emissions Trading System (EU ETS) continued to drive emissions reductions in the power sector and industry in 2024. The report highlights that emissions from installations in the power sector fell by nearly 11% compared to 2023, with renewable electricity production increasing and gas replacing coal in power generation. It also notes that EU ETS emissions from power and industry installations are around 50% below 2005 levels and on track to achieve the 2030 target of a 62% reduction. ([climate.ec.europa.eu](https://climate.ec.europa.eu/news-other-reads/news/2025-carbon-market-report-eu-ets-lowers-power-sector-emissions-and-expands-maritime-transport-2025-12-03_en?utm_source=openai))
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The article references a report published by the European Securities and Markets Authority (ESMA) on 9 July 2026. ([esma.europa.eu](https://www.esma.europa.eu/press-news/esma-news/financial-firms-keep-eu-carbon-markets-moving?utm_source=openai)) The data pertains to 2025, with some information about early 2026. The report is recent and relevant, but the data is not entirely current, as it is now 12 July 2026.
Quotes check
Score:
7
Notes:
The article includes direct quotes from the ESMA report. ([esma.europa.eu](https://www.esma.europa.eu/press-news/esma-news/financial-firms-keep-eu-carbon-markets-moving?utm_source=openai)) However, these quotes are not independently verified elsewhere. The absence of external verification raises concerns about the authenticity and accuracy of the quotes.
Source reliability
Score:
9
Notes:
The primary source is the ESMA report, a reputable EU financial market regulator. ([esma.europa.eu](https://www.esma.europa.eu/press-news/esma-news/financial-firms-keep-eu-carbon-markets-moving?utm_source=openai)) The article also references other reputable sources, such as the European Commission’s Climate Action website. ([climate.ec.europa.eu](https://climate.ec.europa.eu/news-other-reads/news/2025-carbon-market-report-eu-ets-lowers-power-sector-emissions-and-expands-maritime-transport-2025-12-03_en?utm_source=openai)) However, the article’s reliance on a single source for key data points reduces its overall reliability.
Plausibility check
Score:
8
Notes:
The claims about the EU carbon market reaching €777 billion in 2025 and the role of financial firms in driving trading volumes are plausible and align with known market trends. ([esma.europa.eu](https://www.esma.europa.eu/press-news/esma-news/financial-firms-keep-eu-carbon-markets-moving?utm_source=openai)) However, the article does not provide sufficient detail to fully assess the accuracy of these claims.
Overall assessment
Verdict (FAIL, OPEN, PASS): FAIL
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article presents data from the ESMA report, but the lack of independent verification and reliance on a single source for key information raises concerns about its accuracy and reliability. The absence of independently verified quotes further diminishes confidence in the content’s credibility. ([esma.europa.eu](https://www.esma.europa.eu/press-news/esma-news/financial-firms-keep-eu-carbon-markets-moving?utm_source=openai))