This newsletter was published 7.1.2026 at 16:39pm CEST

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

The year 2025 proved to be highly eventful for the EU ETS shaped by a combination of macroeconomic uncertainty and significant geopolitical developments that directly and indirectly influenced market behaviour. While intraday price movements were often contained within relatively narrow ranges, overall volatility increased noticeably over the course of the year. 2025 began on a strongly bullish note. EUA prices rallied sharply, climbing above EUR 80 per tonne in an almost uninterrupted move. Within just over a month, the market advanced by more than EUR 20, reaching a local peak of EUR 84.50 per tonne in the December 2025 futures contract. This level ultimately marked the highest price for the better part of the year, as the market soon began to drift lower. A key driver behind the early-year rally was investment fund positioning. Considerable attention was focused on speculative participation, with funds amassing substantial long positions. At their peak, funds held more than 60 million tonnes of net length—significant, though still below historical extremes. As sentiment shifted, the subsequent liquidation of long positions exerted strong downward pressure on prices, driving EUAs toward the EUR 65 per tonne level. The most pronounced sell-off occurred in early April following the announcement of new tariffs by U.S. President Trump, with the European Union also affected. This development triggered widespread risk aversion and aggressive selling across markets, leading to a sharp capitulation in carbon prices. EUAs reached their yearly low of EUR 60.07 per tonne in the December 2025 futures contract during this period. Following the April lows, the market staged a gradual recovery and entered a prolonged phase of range-bound trading. Prices repeatedly found support just below EUR 70 per tonne, while selling interest typically emerged as the market approached EUR 75. This pattern persisted through most of the summer months, reflecting a balance between supply and demand. By late August, prices began to edge higher. Compliance buyers and industrial participants increasingly accumulated allowances to cover emissions for the year, while financial investors positioned themselves in anticipation of tighter supply conditions ahead. Expectations of reduced auction volumes in 2026 provided a strong underlying support for the market. According to the EEX, total auction volumes for 2026 are expected to decline to 531.3 million allowances, compared with 588.7 million in 2025. Investment funds expanded their net long positions to more than 110 million tonnes toward the end of the year and showed little inclination to take profits, reinforcing the market’s upward bias into year-end. In terms of liquidity, the busiest trading day of 2025 occurred on April 7, when more than 66 million EUAs changed hands. Average daily volume in the December 2025 futures contract stood at just over 29,000 lots, highlighting the continued depth and maturity of the EU carbon market despite only a handful occurrences of heightened volatility.

German power prices are down by 0.65 EUR since last week, with the front-year contract trading at 83.20 EUR/MWh. API2 coal prices are down by 7.30 USD since last week, with the Cal-27 contract trading at 96.70 USD/tonne. Front-year gas prices are down by 0.570 EUR since last week, with the TTF Cal-26 trading at 25.320 EUR/MWh. EUR/USD down by 40 points since last week and is currently trading at 1.1680.

Price development of EUA Dec2026 futures contract