In Tuesday’s session, the European carbon market rose to its highest level since mid-February, with gas prices struggling to keep pace. EUA Dec ’25 settled at €77.51, gaining nearly €2 in just three days.

Traditionally, natural gas has underpinned the carbon market, but recently EUAs have decoupled from the TTF. With higher storage levels and the imminent end of Norway’s maintenance period weighing on gas, EUAs instead appear to be tracking German power, according to Carbon Pulse.

Adding to the momentum, ICE’s Commitment of Traders report released this morning showed that, as of last Friday, investment funds had expanded their net long positions to 68.89 million allowances, up from 54.2 million the week before — the highest level in four years.

Coinciding with this, the euro yesterday reached its strongest level in four years. “The euro is up more than 14% in 2025, set for the best nine-month performance on record, while the dollar gauge fell for a second day, declining more than 9% overall this year,” Bloomberg reported.

A strong euro is fuelling appetite for euro-denominated assets, encouraging funds to increase exposure to European markets, including commodities like EUAs — particularly if they anticipate continued euro strength againts the dollar.