This newsletter was published 22.7.2026 at 16:40pm CEST

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

The carbon market staged a sharp rally over the past week, with the December 2026 EUA futures contract breaking decisively above the long-standing resistance around 82 EUR and extending beyond 85 EUR. The breakout marks a significant shift in market sentiment, with prices rising by more than 10 percent in just four trading sessions. Although the pace of the move has been exceptional, the rally reflects a combination of supportive policy developments, higher energy prices and improving market momentum. The European Commission’s long-awaited ETS reform proposal was the primary catalyst. While the package includes measures that would increase allowance availability later in the decade and extend free allocation for certain industrial sectors, its impact on the near-term market appears limited. Most importantly, the expected supply-demand balances for 2026 and 2027 remain broadly unchanged, implying that the structural shortage projected over the next two compliance years is still intact. The absence of immediate supply relief was interpreted as supportive, prompting a strong repricing across the carbon market. Positioning data also suggests that the rally was not driven by increasingly crowded speculative longs. According to the latest CoT report, investment funds reduced their net long exposure in the week ending 17 July. The lighter positioning, combined with seasonally lower summer liquidity, may have amplified the move higher as buying interest encountered relatively limited selling pressure. The broader energy complex provided additional support. Renewed tensions in the Middle East pushed front-month TTF gas above 62 EUR/MWh. While the market backdrop remains supportive, the speed of the recent advance suggests that short-term volatility could remain elevated.

German power prices are up by 6.00 EUR since last week, with the front-year contract trading at 110.00 EUR/MWh. API2 coal prices are up by 6.00 USD since last week, with the Cal-27 contract trading at 126.00 USD/tonne. Front-year gas prices are up by 2.425 EUR since last week, with the TTF Cal-26 trading at 44.125 EUR/MWh. EUR/USD is down by 30 points since last week and is currently trading at 1.1410

Price development of EUA Dec2026 futures contract