According to the weekly Commitment of Traders (CoT) report published by ICE, investment funds increased their net long positions in EUAs to 17.8 million allowances as of last Friday—up nearly 6% from the previous week.

During the week ending May 23, speculators raised their long positions from 57.6 million to 58 million allowances, a rise of 0.3 million. At the same time, short positions declined by 0.6 million to 40.2 million allowances.

Market participants often view speculators’ positions as a key indicator of sentiment. A net long position suggests that investors are betting on a rise in carbon prices, while a net short position indicates expectations of a decline.

The latest ICE report aligns with trading data, confirming continued bullish sentiment. Since early April, investment funds have steadily increased their net long positions, while the price of Dec’25 EUAs has risen by nearly 16%.

In contrast, within the UK ETS, investment funds have scaled back their net long holdings from a record high reached the previous week. Funds had built up significant UKA positions amid growing expectations that the UK and EU would agree to link their carbon markets.

As of May 16, net long positions in UKAs reached 19.4 million allowances—the highest level ever recorded. However, trading data shows that funds have since reduced their net long holdings to 17.9 million allowances, the lowest in a month. Earlier in the week, an agreement was announced between the UK and EU to begin the process of linking their emissions trading systems.

“It appears that the ‘buy the rumour, sell the news’ principle worked well for investment funds with long exposure in UK emission allowances,” noted Belektron in its weekly analysis, adding that “funds began reducing their exposure, suggesting the theme may have played out, at least to some extent.”