This newsletter was published 19.3.2025 at 16:34pm CEST

The current prices on the European carbon market are as follows:

Weeks before the first quarterly option expiry of the year, EUAs finally found a local low, and prices rebounded with ease. The market had been trading below 70 EUR per tonne for quite some time; however, dip buyers were strong enough to absorb all selling pressure, leaving sellers exhausted. Carbon prices remain highly correlated with gas, which has also been pushing higher. Recent geopolitical developments have reinforced this trend, particularly following talks between Trump and Putin, as the Russian Federation failed to agree on an unconditional ceasefire in Ukraine. This has triggered additional buying pressure in TTF, as the likelihood of gas flow reestablishment has decreased. Additionally, strong auction clearings and increased activity ahead of the March options expiry may have further amplified recent moves in EUAs. Market has been oscillating around the 70 EUR strike level for several days, yet it now seems plausible that it could reach 75 EUR within a few trading sessions. Interestingly, the 75 EUR level still holds the largest open interest in options, surpassing 25 million EUAs. The put-to-call ratio for the March 2025 options expiry still slightly favours puts, standing at 1.08. However, this is close enough to indicate a rather balanced level of interest. Meanwhile, the broader energy complex remained largely unaffected by weather fundamentals over the past week, as wind, hydro, and solar output stayed within long-term averages.

German power prices are up by 3.24 EUR since last week, with the front-year contract trading at 86.74 EUR/MWh. API2 coal prices are down by 1.00 USD since last week, with the Cal-26 contract trading at 103.50 USD/tonne. Front-year gas prices are up by 0.295 EUR since last week, with the TTF Cal-26 trading at 35.105 EUR/MWh. EUR/USD is down by 30 points since last week and is currently trading at 1.0890.

Price development of EUA Dec2025 futures contract