On Monday, after an initial bearish opening to the day, the European carbon market changed direction in the afternoon, tracking similar moves on the gas markets. The EUAs closed the session with a 0.9% daily gain, ending in the green for eight sessions in a row.

On the gas market, TTF front month initially declined due to “milder weather forecasts for the rest of this month across north-west Europe, stronger wind output and easing tension in the Middle East,” according to Reuters.

However, the sentiment did not last however and at the end of the day, TTF gas was up 2%. “As with most other markets, there was some hesitation ahead of the inauguration of Donald Trump and this will likely continue in the coming days”, writes Energi Danmark this morning.

Just hours after taking office, Trump ordered the US to again withdraw from the Paris climate agreement, distancing his country, the second biggest emitter, from the worldwide efforts to combat climate change.

Furthermore, Trump lifted a moratorium on LNG export licenses which could benefit Europe in search of a new source of gas after Russia cut supplies to the continent.  “Still, any impact on the market is likely to come later this decade when new projects come online and this year could still be challenging for Europe as it needs more LNG to cover demand,” warns Bloomberg. 

Both carbon and gas tried to maintain the upward momentum on Tuesday morning, but are currently moving in the opposite direction, with EUAs trading slightly lower while TTF front month rising insignificantly, signaling a “wait and see” approach.