Last week, carbon allowances traded within a €2.86 range—the narrowest weekly corridor since the start of the year—as market participants searched for direction amid heightened geopolitical uncertainty and limited clarity surrounding the upcoming EU ETS revision.

Furthermore, trading activity slowed noticeably, with only 85.2 million allowances changing hands. This represented a 26.13% decline compared to the previous week, reflecting weaker market participation and reinforcing the market’s cautious stance as participants remained on the sidelines.

At the end of Friday’s session, EUAs settled at €74, showing only minor changes compared to Thursday’s close of €74.85, while still posting a 3.3% weekly decline. It is also worth noting that carbon prices are consolidating around €75, the level Ursula von der Leyen signaled following the EU Council meeting in March as “a fair level.”

On Monday morning, EUAs continued their recent trend of trading around the €75 level, suggesting that the market is consolidating near what many participants now view as a key reference point. As noted by Mind Energy, “the market remains closely linked to the stock markets,” while increasingly decoupling from the gas market.

“Elevated geopolitical uncertainty and a deteriorating macro backdrop continue to weigh on sentiment. At the same time, ongoing EU ETS reform discussions limit visibility into forward demand, leaving EU carbon prices in price discovery mode with little conviction,” according to analysts at BBVA this morning.