Saying that last week was one of major turbulence for the European carbon market is an understatement. The market came under massive pressure, with EUA Dec’26 dropping to a five-week low before posting a 3.95% weekly decline, as prices settled at €88.49 in Friday’s session.

Last week’s focus shifted to Donald Trump’s attempts to pressure Europe through tariffs amid his pursuit of Greenland. The market reaction—sharp declines early in the week followed by a modest rebound after President Trump withdrew his threats—is what many traders describe as classic TACO behavior.

In April 2025, following Trump’s Liberation Day announcement, the European carbon market came under intense bearish pressure, recording a sharp 7.24% weekly decline. This time, however, the reaction was more muted than during the initial tariff turmoil, suggesting the market is becoming increasingly immune to such headlines.

Also noteworthy was the weekly turnover of 461 million allowances, with daily volume reaching 157 million allowances on Tuesday—more than the entire previous week—in what Carbon Pulse described as “the busiest-ever day for front-December futures.” This unusually high turnover suggests that speculative positions have been trimmed, and we expect Wednesday’s Commitment of Traders report to confirm this.

Although it is difficult to anticipate Trump’s next move, one thing is clear amid the uncertainty: U.S. tariff policy will continue to dominate global market discussions over the remaining three years of his mandate, leaving European energy-related markets, including carbon, particularly vulnerable to Trump’s ongoing tariff limbo.