The European carbon market ended Friday’s session with a slight rebound, while still recording a 1.68% gain for the week. The EUA Dec’26 contract settled at €75.18, posting a modest daily increase of €0.05 after trading within a narrow intraday range of just €1.01 — the tightest daily trading range since early January.

Trading activity remained subdued throughout the session, further reflecting the market’s cautious sentiment. A total of 11.3 million allowances changed hands, marking the lowest daily volume recorded this year, excluding 1 May, when trading activity was reduced due to the public holiday.

“The muted participation reflects a lack of conviction and direction amid overwhelming macro and micro uncertainties,” BBVA analysts said, pointing to geopolitical risks surrounding the Strait of Hormuz and uncertainty over future EU ETS reforms as key factors weighing on market confidence.

Market attention is expected to remain focused on US-Iran peace talks, as well as negotiations between European institutions over the trade agreement reached with the US last July. On Monday morning, energy-related markets reacted with rising prices after President Donald Trump said Iran’s response to a US peace proposal was “unacceptable,” raising concerns over supply disruptions as the Strait of Hormuz remained largely closed, tightening global energy markets.

However, the European carbon market remained calm on Monday morning, once again trading around the €75 level and largely ignoring the geopolitical noise, as market participants appeared increasingly fatigued by headlines surrounding the Iranian conflict.

“We expect this to remain the case this week, where the volatility surrounding the Middle East peace negotiations will once again likely fail to have a big effect on carbon,” Mond Energy noted this morning.