This newsletter was published 21.5.2025 at 17:36pm CEST

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

A strong rally last week pushed EUAs slightly above 75 EUR per tonne for the December 2025 futures contract, before sharply reversing course. The entire sell-off occurred on Friday afternoon when selling pressure became too intense for the market to absorb. Within just a few hours, EUAs dropped by 4 EUR, and the market was once again eyeing the 70 EUR level, which was briefly breached earlier this week. Despite relatively weak participation in Monday’s auction, EUAs traded strongly and began to rally again. However, even more interesting developments have been unfolding in the UK ETS market. A significant move occurred on Monday after the EU and UK governments reached a preliminary agreement to link the EU and UK ETS schemes. This news triggered a strong rally, pushing UKAs above 55 GBP per tonne for the December 2025 futures contract — the highest level in nearly two years. Although there had been much speculation on this topic, the announcement removed a great deal of uncertainty. Some analysts expect a fully operational linkage by 2028, assuming all necessary issues are resolved. According to the weekly CoT reports, investment funds have shown strong confidence in the UK ETS scheme, as they continue to pour money into the market. The most recent report revealed another week-on-week increase in net length, which has now surpassed 19 million tonnes. Meanwhile, investors in EUAs have remained more cautious, holding a net long position of around 17 million tonnes.

German power prices are up by 1.65 EUR since last week, with the front-year contract trading at 89.85 EUR/MWh. API2 coal prices are up by 4.00 USD since last week, with the Cal-26 contract trading at 106.00 USD/tonne. Front-year gas prices are up by 1.215 EUR since last week, with the TTF Cal-26 trading at 35.000 EUR/MWh. EUR/USD is up by 150 points since last week and is currently trading at 1.1350.

Price development of EUA Dec2025 futures contract