Matthew Gray of Jefferies, an investment bank, reckons that by 2020 the ETS will have an accumulated surplus of 845m permits, against a planned cap that year of 1.8 billion permits.

ECONOMIST: A market in need of a miracle

"The two dominant price drivers of European carbon are political will and economic growth, and both are questionable at present, " said Matthew Gray, carbon analyst and trader at Jeffries in London.

WSJ: Europe's Carbon Market Trips on a New Proposal

The shale gas revolution in the US, which has lowered energy prices for the country's manufacturers, has heightened Europe's concerns about industrial competitiveness, according to Matthew Gray, a carbon analyst at Jefferies.

CNN: Eurozone woes push climate reform to backseat