ECM Market Brief: March 2026

Market Snapshot

CCP-labeled cookstove prices rebased upward following Gold Standard's first CCP-eligible credit labeling in December 2025. The USD 8-10 range in prior briefs reflected general improved cookstove credits, not CCP-labeled supply.

Top Story: EUA Hits 11-Month Low as 10 Member States Demand MSR Reform

The EUA Dec-26 contract dropped to EUR 66.65 on March 20 — an 11-month low representing a 6.3% weekly decline. On March 18, ten EU member states — Austria, Bulgaria, Czech Republic, Croatia, Greece, Hungary, Italy, Poland, Romania, and Slovakia — sent a formal letter to the Commission describing the current ETS framework as an "existential risk" for European strategic industries.

Commission President von der Leyen signaled that the MSR will be strengthened to "more effectively address excessive price volatility." The Commission resisted calls for a wholesale overhaul, pushing energy tax cuts instead. On the opposing side, seven member states (Denmark, Finland, Latvia, Luxembourg, Netherlands, Portugal, Sweden) defended the ETS as saving "Europe about EUR 34 billion per year."

EUAs surged more than EUR 6 intraday on March 20 alone, rapidly recovering from the bottom. Prices settled at ~EUR 69 by month-end. Auction cover ratios held at 1.9-2.3x through March, indicating institutional buyers continued to bid aggressively on dips.

Market Moves

EUA: Structural supply tightening collides with political pressure. The MSR's September 2025-August 2026 intake of 275.5 million allowances (largest since 2021) continues to tighten supply. But the 10-member-state "existential risk" letter and von der Leyen's MSR reform signal have placed the market between structural tightness and political loosening expectations. The April 30, 2026 surrender deadline for 2025 verified emissions should provide compliance buying support into Q2.

VCM: CCP-labeled retirements doubled. CCP-tagged retirements rose from 3% to 7% of total retirements in 2025 — more than doubling year-on-year (ICVCM CCP Impact Report 2025). By end-November 2025, ICVCM had approved 7 programs and 36 methodologies. Over USD 10 billion was committed to new carbon credit generation in 2025 — triple 2024 levels. For the first time, retirements are overtaking issuances for premium credits, creating scarcity and price resilience. Gold Standard labeled its first CCP-eligible cookstove credits in December 2025 across projects in Kenya, Togo, Nigeria, and Mongolia.

China ETS: Cement, steel, and aluminum now covered. The official expansion announced in March 2025 brought +1,500 companies and +3 billion tonnes CO2e under coverage. Post-expansion totals: ~3,700 entities, ~8 billion tonnes (15% of global emissions). China's carbon price is at ~CNY 90/tonne (~USD 12.5) — roughly a 5.5x gap versus the EU ETS. The January 2026 vintage conversion rules eliminated legacy surplus, creating upward price pressure.

EAC: I-REC and YEK-G stable, but demand structure is shifting. Turkey I-REC prices held at USD 0.12-0.15/MWh (ECM Terminal). YEK-G at TRY 2.5-3.5/MWh (ECM Terminal); corporate Scope 2 reporting and CSRD's expanding scope are driving demand. On the EU side, solar GO prices have firmed to the EUR 2.50-4.00 range.

Regulatory Signals

MSR reform proposal tabled (April 1, 2026). The Commission proposed amending the MSR Decision: stopping the invalidation of allowances above the 400 million threshold, keeping them instead as a buffer to support market stability in volatile periods. The proposal enters ordinary legislative procedure with Parliament and Council. A comprehensive ETS review follows in July 2026.

UK CBAM launches January 2027. The UK's own CBAM mechanism begins January 2027. UK-EU ETS linking negotiations commenced in May 2025; price convergence has not materialized (UKA ~GBP 45-50 vs EUA ~EUR 69).

Article 6 transaction volumes rising. Approximately 100 bilateral agreements are now in force (20 new agreements added in 2024). Switzerland and Singapore continue aggressive ITMO procurement (Switzerland: 29 CHF/tCO2e average for 2022-2030 delivery, Singapore's February 2025 tender: USD 18-40+).

Positioning Note

EU ETS: The April 1 MSR reform (buffer instead of invalidation) clarifies the medium-term supply outlook. Structural supply contraction (275.5M intake, 4.3% linear reduction, maritime 100% coverage) makes EUR 65 a defensible floor. Seasonal compliance support is expected through the April surrender window.

VCM: The scarcity signal for CCP-labeled premium credits is strengthening. ARR (BBB+) at USD 27/tCO2e (ECM Terminal); forward quotes exceed USD 50. REDD+ average at USD 2.70 remains under pressure in the low-quality segment. The doubling of CCP retirements from 3% to 7% is the year's most important structural development.

EAC: Turkey I-REC at USD 0.12-0.15/MWh offers significant value (ECM Terminal). YEK-G at TRY 2.5-3.5/MWh; demand should strengthen in H2 2026 as corporate Scope 2 reporting requirements expand.

Week Ahead / Dates to Watch

• Apr 7: This brief's publication date
• Apr 8: UK ETS auction — new ARP of £28 applies for the first time
• Apr 30: EUA surrender deadline for 2025 verified emissions
• Jul 2026: Commission's comprehensive ETS review expected
• Feb 2027: CBAM certificate sales begin (first year)

Sources: ICE Endex, EEX Auction Results, ECM Terminal, Euronews (March 18, 2026), European Commission (April 1, 2026), ICVCM CCP Impact Report 2025, Gold Standard (December 9, 2025), ICAP China ETS, Sylvera Carbon Market Trends 2026, World Bank State and Trends 2025, OECD 2025