On Tuesday, the European carbon market rebounded strongly, recovering most of the losses sustained over the previous two trading sessions. The benchmark EU Allowance (EUA) contract for December 2025 closed at €73.18, posting a notable daily gain of 3.92%.

The upward trend in the carbon market was largely driven by rising gas prices. On Tuesday, the TTF front-month contract settled 4.98% higher, reaching a six-week high amid sharply reduced gas deliveries from Norway and fading hopes for a peace agreement.

According to Gassco, the Norwegian grid operator, gas flows to Europe dropped to 160.1 million cubic meters (mcm) this morning, down significantly from 299 mcm the previous day. Scheduled maintenance at several major fields and facilities this week is expected to reduce nominations by nearly 50%—a bullish signal for gas prices.

Geopolitical uncertainty also added upward pressure. The European gas market reacted to waning optimism over a potential ceasefire between Russia and Ukraine. “The market was somewhat disappointed by the telephone call between Trump and Putin, which did not appear to lead anywhere in the Ukraine peace process,” noted Mind Energy this morning.

Meanwhile, gas storage levels in Europe remain well below seasonal norms. According to data from Gas Infrastructure Europe (GIE), storage is currently 44.91% full—significantly lower than 67.5% at the same time last year, and nearly 10% below the five-year average. To secure the LNG volumes needed to refill storage ahead of next winter, Goldman Sachs, as cited by Bloomberg, noted that “prices must remain at current levels, or slightly higher, to curb LNG demand from other regions.”

In addition to stronger gas prices, analysts also pointed to reduced EUA auction supply next week as a further bullish factor for carbon. Due to the Ascension Day holiday, the EEX is scheduled to hold only two auctions, offering a total of 5.2 million EUAs—well below the 13.3 million allowances typically available during a full auction week that includes a Polish sale.