This newsletter was published 1.10.2025 at 16:45pm CEST

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

EUA prices eased at the end of September as market participants locked in partial profits and reduced risk exposure. What stands out is that, despite a strong three-week rally earlier in the month followed by a retracement, open interest in the December 2025 futures contract remained within 15 million tonnes out of 360 million outstanding at the moment. This indicates that trading activity has been driven mainly by existing positions changing hands rather than new entrants building exposure. With the compliance deadline expiring yesterday, upside momentum stayed muted. On the downside, the market repeatedly found support around the psychologically important 75 EUR level, attracting steady buying interest during pullbacks. However, after several failed attempts to break lower, sellers finally gained control on the fifth test, pushing December 2025 futures down to 74.51 EUR, before rebounding back above 75 EUR. The decline was triggered shortly after publication of the weekly Commitment of Traders report. Investment funds still hold over 76 million tonnes of net length, but last week saw the first reduction in long exposure since early August. Whether this marks the start of a shift in positioning or simply a tactical adjustment remains unclear. Auction dynamics have also been telling. Recent auctions mostly cleared in line with prevailing spot prices, signalling healthy demand. Yet Thursday’s auction stood out, as it offered a slight discount with the weakest cover ratio in four years, at just 1.08. Historically, such low coverage would have led to deeper discounts, but this time buyers were still willing to bid close to market levels. This could be interpreted as a mixed signal, as it showed continued willingness to buy at market prices, but with fewer participants overall.

German power prices are down by 1.55 EUR since last week, with the front-year contract trading at 84.65 EUR/MWh. API2 coal prices are up by 0.15 USD since last week, with the Cal-26 contract trading at 101.35 USD/tonne. Front-year gas prices are down by 0.790 EUR since last week, with the TTF Cal-26 trading at 31.050 EUR/MWh. EUR/USD is up by 10 points since last week and is currently trading at 1.1750.

Price development of EUA Dec2025 futures contract