Lately, attention in the carbon market has shifted to the upcoming revision of the EU ETS, after the European Commission announced a “comprehensive climate package” for the second half of 2026. In this context, media speculation about looser regulations has weighed on sentiment, sending a bearish signal for EUAs.

During Thursday’s session, EUAs briefly traded above €83 before reversing sharply, ending the day down 5.7% from the previous close—the steepest daily drop in two years. Heavy turnover of 96.5 million allowances points to speculators continuing to close positions, this time amid a Bloomberg report that unsettled market sentiment.

Citing EU policymakers and diplomats, the article states that “less than three years after tightening the market in a green push, governments are ready to slow the pace of pollution cuts and consider measures that would alleviate industry costs.”

“The EU narrative has shifted — from aspirational targets to implementation and execution, from idealism to pragmatism,” said Ingo Ramming, head of carbon markets at BBVA, quoted by Bloomberg.

Another report earlier this week in German business newspaper Handelsblatt indicates that the EU plans to extend both free allocation and auctioning beyond previously agreed periods, also citing EU officials with knowledge of the issue.

Peter Liese, an influential member of the European Parliament and former lead rapporteur for the overhaul of the EU Emissions Trading System (ETS) under the ‘Fit for 55’ package, sought to temper the rumours.

“All the attacks on the ETS to destroy it or put it on hold are completely irresponsible,” he said in an interview. However, he added that “changes are needed and we can ease the pressure on companies without risking our climate targets.”