The European carbon market had a strong start on Thursday morning, responding bullishly to news that the EU is making progress in trade negotiations with the US. However, as ClearBlue Markets noted, “the morning rally on tariff deal optimism was proven to be short-lived,” with EUAs slipping back below €70” in the afternoon.

The mid-day decline was prompted by falling gas prices, driven by growing optimism about meeting EU storage targets. Timera Energy noted that underground facilities could reach 81% capacity by October 1, indicating they are “well on track to meet mandates” due to higher-than-usual LNG deliveries.

According to Timera, “since the start of the new gas storage year on 1 April 2025, injections have averaged ~315 mcm/d across Europe, above the five-year average of 258 mcm/d over the equivalent period.”

Carbon prices shifted direction once more late in the session, mirroring the previous day’s pattern, as they tracked broader financial market trends, with European equities ending mostly higher on renewed trade deal optimism.

The EUA Dec’25 contract ended the session at €70.88, rising 2.19%—marking its largest daily gain in three weeks. Trading activity also intensified, with 30.79 million allowances exchanged—the highest volume in a month and more than 50% above the July daily average.