European carbon prices had a weak start to the week, extending the downward trend that began just ahead of the compliance deadline, likely reflecting broader bearish sentiment across energy-related markets.

EUA Dec’26 traded as low as €82.35 amid sustained selling pressure, before recovering part of its losses later in the session. The benchmark contract eventually settled at €83.87, its lowest closing level in six weeks and its seventh losing session in the past nine.

Also notable, trading volume reached 28.7 million allowances, well above last month’s daily average of 23.1 million and the highest level since mid-September, suggesting that the decline was accompanied by increased market participation.

The picture changed on Tuesday. EUAs initially appeared set to extend their losses in morning trading, but reversed course sharply in the afternoon as carbon once again followed movements in the energy complex, tracking a strong rally in European gas prices.

The gas market remains “vulnerable, despite signs of a more recent pick-up in LNG flows from the Persian Gulf,” according to ING analysts, who pointed to relatively low EU gas storage levels.

According to GIE data as of 5 October 2026, EU gas storage stood at just 72.67% full, well below the five-year average of around 88%, leaving the market particularly sensitive to shifts in weather forecasts, LNG supply and heating demand.

At the same time, expectations for a milder winter could provide some bearish counterweight to both gas and carbon prices. With the heating season approaching, weather forecasts and their impact on gas fundamentals are likely to become increasingly important drivers for the carbon market as well.