On the final day for surrendering allowances for the previous year’s emissions, the European carbon market reversed course, ending a two-day advance. The EUA Dec ’25 contract settled at €75.72 on Tuesday, down 1.39%.

The month opened on a strong note, with EUAs rising 4.18% in the first week — a rebound anticipated after a lackluster August and ahead of the surrender deadline. Toward the end of the month, however, selling pressure set in, leaving the market with a more modest 2.37% gain overall.

The notable event in Tuesday’s trading was the sharp decline in gas prices, with the TTF front-month contract dropping 3.56% — its steepest fall in more than four months — as flows from Norway increased following the end of the maintenance season.

In addition, milder weather is forecast for many countries next week, including Germany, Europe’s largest gas consumer. According to AleaSoft Energy Forecasting, power demand is expected to decline this week across most major European markets.

The outlook could shift, however, if Asian demand strengthens or forecasts point to a harsh European winter. In the near term, the carbon market is likely to reposition, returning to a neutral-to-bearish stance after the surrender deadline, as has occurred in previous years. Moreover, carbon prices are likely to shadow gas more closely as winter approaches, though the extent will depend on weather patterns and broader energy market fundamentals.