The European carbon market remained relatively calm in yesterday’s session. After an early drop to a ten-month low of €67.90 — a move that had largely been anticipated — the EUA Dec ’26 contract recovered and closed at €70.57, posting a daily gain of 0.40%.

Carbon appeared caught in a genuine dilemma. “It seems to be undecided between the pull from gas prices and the pressure from geopolitical risks and a shaky macro backdrop,” said carbon analyst Yan Qin, describing yesterday’s trading.

On the gas market, the TTF front-month contract gained an impressive 40% in yesterday’s session, with prices continuing to rise on Tuesday morning. “The region could now face an energy shock on top of a trade shock,” ING analysts warned, pointing out that the current tumultuous period “could bring back memories of the energy cost crisis from late 2021 to 2023.”

Following the massive surge in gas prices, a European Commission spokesperson told Reuters that “the European Union’s gas supply coordination group will meet on Wednesday to discuss the impact of the expanding conflict in the Middle East.”

In the current context of heightened vulnerability to gas price spikes across Europe, Italy’s recently approved energy package to lower carbon costs on gas-fired generation — as highlighted by experts quoted in Montel News — could gain broader political traction.

Furthermore, pressure from certain member states to soften climate ambition within the framework of the EU ETS reform scheduled later this year may also gather momentum.