The latest Commitment of Traders (CoT) report from the ICE platform, published on Wednesday morning, shows that investment funds reduced their net long holdings (long positions minus short positions) for a second consecutive week.

According to market data available as of last Friday, net long positions declined by 1.18 million allowances compared with the previous week, bringing the total to 114.98 million allowances.

Despite the decline, “the net long position in the carbon market remains robust,” as noted by Mind Energy, standing at the third-highest level on record. Net speculative EUA holdings have risen sharply since September, and from November this year onward the previous record of around 104 million allowances, set in May 2021, has been exceeded every single week.

Record net holdings are being driven by investor optimism that carbon prices will surpass €100 in 2026, according to Climate Market Now, supported by the sharp reduction in auction supply expected to begin that year.

However, ING analysts warned back in December that “while the outlook for the EUA market is constructive, it does appear as though investment funds have got a bit carried away with the outlook.”