European carbon prices moved lower during Friday’s trading session, with the EUA Dec’26 contract shedding almost €1 to settle at €81.79. The decline left the benchmark contract 1.8% below the previous Friday’s close, reversing part of the gains recorded earlier in the month.

Compared with the heightened volatility seen across energy-related markets, the carbon market appeared notably subdued, with the benchmark contract confined to a narrow trading range of just €1.9 over the week.

Trading activity also remained particularly subdued, with only 72.4 million allowances changing hands, well below this year’s average weekly volume of around 140 million allowances. This marked the second-lowest trading volume recorded so far this year, surpassed only by the particularly quiet period ahead of the Easter holidays.

According to Engie Energy Scan, “EUAs have entered a consolidation phase, with the market lacking a clear near-term catalyst despite an increasingly tightening balance towards the end of the year.”

The picture was markedly different in the European gas market, with the TTF front-month contract posting a sharp 10.6% weekly gain. “The market is for now losing hopes that a US-Iran peace deal is imminent and this combined with low storage levels after a so far warm summer in Europe causes a bullish sentiment on the market,” Mind Energy said in a note this morning.

In a thin summer market, even relatively modest trading flows can trigger sharp price moves and quickly extend a breakout in either direction. Yet, for now, the carbon market appears somewhat insulated from the developments driving volatility across energy-related markets.

This lack of conviction may reflect limited visibility around the EU ETS reform, alongside continued uncertainty over European industrial activity. Together, these factors could keep EUA prices confined to their current trading range, at least until late compliance buying provides a clearer source of demand.