This newsletter was published 19.2.2025 at 17:56pm CEST

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

After more than a month of strong upward momentum, EUAs have finally reached a level where continuing to accumulate long positions has become too risky. The market tested levels above 84 EUR several times; however, buying pressure weakened at that point, allowing sellers to take control. Just a week later, EUAs are now trading 10 EUR lower, hovering slightly below 75 EUR for December 2025 futures contract. It appears that investment funds accumulated long positions too quickly, and a shift in fundamentals triggered a sharp price decline. According to the latest CoT report, which publishes Friday’s positions, investors still hold over 58 million tonnes of emission allowances. However, this number has likely decreased due to market developments over the past few days. Moreover, sentiment has gradually shifted from bullish to more bearish, and related markets have followed suit. Geopolitical events over the past week have also contributed to a more risk-averse environment. High-ranking political representatives from the U.S. and Russia met in Saudi Arabia to discuss a potential ceasefire in Ukraine and the lifting of sanctions. Such developments could ease commodity prices, at least to some extent, and strengthen trading ties. Another key event that market participants are closely watching is the German parliamentary election on Sunday. According to live polls, the CDU/CSU party is still expected to win, with AfD in second place. However, any unexpected outcome could add further volatility to the market, potentially opening the door to even more downside risks.

German power prices are down by 11.35 EUR since last week, with the front-year contract trading at 88.25 EUR/MWh. API2 coal prices are down by 6.00 USD since last week, with the Cal-26 contract trading at 107.50 USD/tonne. Front-year gas prices are down by 6.235 EUR since last week, with the TTF Cal-26 trading at 37.875 EUR/MWh. EUR/USD is up by 50 points since last week and is currently trading at 1.0410.

Price development of EUA Dec2025 futures contract