Price drivers - Policy fears in EU ETS

As in every commodity market, the price for EU Allowances (EUAs) under the EU ETS is determined by the relationship between supply and demand. In this case, the demand for allowances is given by the relation between the actual and the allowed amounts of CO2-emissions. The actual emissions, on an aggregate level, are given by the concrete levels of technology advancement and the stack generation. This, again, is dependent on key fundamentals such as fuel prices, power prices and weather. The