This newsletter was published 27.8.2025 at 16:24pm CEST

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

Carbon prices found some support last week as investment funds showed renewed interest in building long positions. Market dynamics in recent weeks – and even months – have been highly cyclical, particularly when focusing on investment funds activity. Typically, when prices rise, funds increase their net long exposure, while they cut positions when the market weakens. This back-and-forth created a clear trading range. Buyers tend to step in around 70 EUR on the December 2025 futures contract, while momentum usually fades once prices push above 73 EUR. The lack of a clear trend and the repeated fading of rallies has driven implied volatility in EUA options to the lowest levels. One factor that could shift sentiment is the upcoming compliance deadline at the end of September. Historically, late buying ahead of deadline has supported prices, and this year it may encourage participants to hold onto their long positions rather than selling into weakness. Strength has also been visible in daily auctions, which in recent days have cleared above the secondary market, a sign of steady underlying demand. From a technical perspective, the 200-day moving average has once again been tested and held, reinforcing the bullish case for EUAs. By contrast, other parts of the energy complex look softer. The latest CoT report shows funds continuing to cut net length in TTF gas, likely reflecting mild weather forecasts and healthy levels of underground storage. Compared to that backdrop, EUAs appear relatively resilient.

German power prices are up by 1.10 EUR since last week, with the front-year contract trading at 84.70 EUR/MWh. API2 coal prices are down by 3.80 USD since last week, with the Cal-26 contract trading at 104.80 USD/tonne. Front-year gas prices are up by 0.365 EUR since last week, with the TTF Cal-26 trading at 31.975 EUR/MWh. EUR/USD is down by 60 points since last week and is currently trading at 1.1600.

Price development of EUA Dec2025 futures contract