European carbon prices climbed in early trading yesterday, with the EUA Dec’25 contract hitting an intraday peak of €70.35 in the afternoon. The rally later faded, however, after a letter from Ursula von der Leyen ahead of Thursday’s gathering of EU leaders in Brussels weighed on sentiment, leaving prices to settle at exactly €69, more than €1 below the day’s high.

In the context of the crisis stemming from the Middle East conflict, the document outlines several measures the EU executive plans to use to tackle rising energy costs, focusing on four key areas: electricity prices, network and grid charges, taxes and levies, and carbon costs.

According to the letter, the Commission will shortly adopt the ETS benchmarks, “taking into account concerns expressed by industry,” in response to a separate letter signed last month by more than 1,300 companies, associations, and unions across Europe calling on EU officials to take urgent and decisive action.

Ursula von der Leyen also added that the executive “will present a proposal to increase the firepower of the Market Stability Reserve, so that it can more effectively address excessive price volatility and keep prices in check in the short term.” Furthermore, the Commission is planning “to accelerate work on the upcoming ETS revision, notably to set out a more realistic decarbonisation trajectory beyond 2030.”

The European carbon market continued to decline on Tuesday morning, with the EUA Dec’25 contract trading comfortably below €67, as attention turns to the European Council summit scheduled for Thursday. The key item on the agenda will be the region’s response to the economic fallout from the Middle East conflict, with a particular focus on elevated energy prices.