The European carbon market staged a modest rebound during Tuesday’s trading session, with EUA Dec’26 briefly dipping to €84.01 before recovering in the evening session to close 0.6% higher than the previous day.

The upward momentum was driven by growing optimism over progress towards linking the EU and UK emissions trading systems. According to Carbon Pulse, citing media reports, “the UK and EU have reached an agreement to link their respective emissions trading systems, with a deal expected to be unveiled at a bilateral summit next month.”

While gains in the EU ETS remained relatively modest, the British carbon market reacted much more strongly to the news. UKA Dec’26 surged to a seven-month high, posting a significant daily gain of 4.12% .

Following the launch of the UK ETS in 2021, UKAs initially traded at an average premium of around 10% to EUAs. However, this trend reversed in 2023, with British carbon allowances subsequently trading at a substantial discount to their European counterparts. Despite the recent rally, UKAs continue to trade at a discount of approximately 13% to EUAs.

The agreement is expected to be formally unveiled at the upcoming UK–EU summit, reportedly scheduled for 20 November 2026, according to the Financial Times. However, the date has not yet been officially confirmed.