The role of financial operators in the ETS market and the incidence of their activities in determining the allowances’ price

This study investigates the role of financial actors, such as banks and investors, in the EU Emissions Trading System and their role in determining price dynamics and volatility. It concludes that activities on the market should be further monitored and data availability and quality improved. While further regulation of market participants may become necessary in the future, it is, at this stage, more important to focus on improving the Market Stability Reserve (MSR). This document was provided by the Policy Department for Economic, Scientific and Quality of Life Policies at the request of the committee on Industry, Research and Energy (ITRE).

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