According to the latest Commitment of Traders (CoT) report released on Wednesday by ICE, investment funds participating in the European carbon market raised their net long positions (long-short) to 102 million allowances in the week ending November 14, marking a 4.5% increase compared with the previous week.

The data show that, as of last Friday, speculators increased their long holdings in EUAs from 124,4 million to 131,6 million allowances, the largest ever as observed by Carbon Pulse. During the same period, they also build on their short positions from 26,9 million to 29,6 million allowances.

The reason behind this massive accumulation is attributed by analysts to rising expectations of tighter supply next year amid declining EU ETS cap, MSR withdrawals and fewer auctioned allowances as  the frontloading of auctions for REPowerEU is expected to end “at the latest on 31 August 2026, as stated by the European Commission. 

Following the report, the market dropped, a reaction that analyst Yan Qin of ClearBlue Markets interprets as a sign that participants believe net long exposure may have already reached its peak.