Thursday was a bearish session for the European carbon market, tracking broader declines in equity markets. The EUA Dec ’26 contract settled at €75.13, down €0.92 on the day, after reaching an intraday high of €76.77.

European stock markets also ended Thursday in negative territory as hopes for a lasting peace agreement began to fade once again. The market decline appeared to be a correction following recent gains, which many investors viewed as overly optimistic.

The downward trend continued on Friday morning following reports of fresh clashes between U.S. and Iranian forces. “U.S. President Donald Trump said the ceasefire was still in effect despite forces clashing in the Gulf, with Washington awaiting a response from Tehran to its proposal to end the conflict,” according to Reuters.

Optimism over the prospects for a lasting peace is fading once again, with analysts at ING warning that “There’s a good chance investors will prove more cautious and won’t jump as aggressively into de-escalation trades without concrete progress in negotiations.”

Adding to market concerns, U.S. President Donald Trump warned on Truth Social on Thursday that the EU could face substantially higher tariffs if it failed to implement its side of the agreement reached last summer before July 4. The renewed tariff threat came after the European Parliament’s chief negotiator, Bernd Lange, said negotiations between lawmakers and governments were advancing well, although important issues still remained unresolved.

With the market awaiting further developments regarding both the situation in the Middle East and the upcoming ETS reform, EUAs continue to trade around the €75 level. Market participants increasingly view this price level as an important reference point following Ursula von der Leyen’s proposal in March to establish a €30 billion ETS Investment Booster funded through 400 million ETS allowances. 

The proposal was widely interpreted by the market as an indication that the European Commission considers a carbon price around €75, which comes from dividing the proposed €30 billion by the 400 million allowances earmarked to finance it, to be broadly acceptable.