The European carbon market recorded another positive session on Tuesday, extending its winning streak to four consecutive days as bullish sentiment persisted. EUA Dec’26 futures settled at €72.51, marking their highest closing level in three weeks.

Earlier in the month, carbon prices fell to an 11-month low of €63.10, pressured by EU leaders’ discussions on potential measures to reduce EU ETS costs. However, the market rebounded in the final sessions, ending the month with a 3.2% gain, although prices remain approximately 17% below last year’s settlement.

According to S&P Global Energy, “the coming months are likely to see continued price volatility, as the market digests the implications of MSR reforms.” Despite this, analysts expect carbon prices to average around €73 in 2026, broadly in line with current levels.

A similar outlook is shared by CRU Group, which noted that “overall, we expect downward pressure from strong wind generation and weak demand to be balanced by policy support for the carbon system, keeping carbon prices at the current low levels.”

CRU Group also expects the US-Iran conflict to persist into April, “keeping economic outlook subdued.” At the same time, power demand is seasonally lower than in March, while weather forecasts point to average temperatures.

While gas-to-coal switching typically exerts upward pressure on carbon prices, most of this shift already occurred in March. As a result, despite ongoing geopolitical risks that could still drive gas price spikes, the additional impact on carbon prices in April is expected to remain limited.