The downward trend that began late last week continued on the European carbon market on Monday, with EUAs falling to their lowest level in a week before closing at €76.21, a daily decline of 1.73%.

With one week remaining before the compliance deadline, the upward momentum that pushed EUAs to a seven-month high last week appears to have lost steam. “Technical signals point to another short-term correction that could be similar to the one recorded at the beginning of the month,” wrote BBVA analysts.

According to a status update released last week, the European Commission has so far distributed 85.52% of the free allowances earmarked for industry on the carbon market this year. This means some installations are still waiting to receive their 2025 allocation, which in many cases can be used to cover 2024 compliance obligations.

Delays in the distribution process restrict companies from “borrowing” this year’s allocation to cover last year’s emissions, pushing them toward last-minute purchases — a dynamic that could lend support to carbon prices.

Additional support may also come from weather forecasts. According to AleaSoft, wind energy production is expected to fall this week in the German, French, Spanish, Portuguese, and Italian markets, raising demand for conventional fuels. At the same time, auction supply will tighten over the next two weeks, with only eight sales scheduled.