Following the previous week’s bullish sentiment, investment funds maintained broadly stable net long positions in carbon allowances, according to the latest Commitments of Traders (CoT) report released by ICE on Wednesday, signalling a broadly neutral outlook among speculative traders.
According to Carbon Market Watch, an NGO focused on climate policy and carbon markets, the revision of fallback benchmarks risks “entrenching the EU’s fossil dependency by reducing incentives to decarbonise.”
The European carbon market remained on a downward trajectory last week, recording losses in four of the five trading sessions. Prices settled at €85.41 per tonne on Friday, down 0.5% on the day, bringing the overall weekly decline to 1.8%.
Investment funds increased their net long positions in carbon allowances by 15.5% last week, according to the latest Commitment of Traders (CoT) report released by ICE on Wednesday, signalling a strengthening bullish outlook among speculative traders.
Bullish momentum continued to dominate the European carbon market, with EUA prices tracking sharp gains across the energy complex, particularly natural gas, amid what Carbon Pulse described as “aggressive buying.”
Despite a bearish opening on Monday, European carbon prices recovered steadily over the following sessions, with the EUA Dec’26 contract closing Friday at €86.94, just €0.06 above Thursday’s close, but securing a 3% weekly gain.
The European carbon market climbed to an intraday high of €87.03/tCO₂ on Thursday before closing at €86.88/tCO₂, posting a daily gain of nearly 2%, its largest increase in three weeks. This marked the third consecutive session of gains, reinforcing the market’s recent bullish momentum.
The European carbon market staged a modest rebound during Tuesday’s trading session, with EUA Dec’26 briefly dipping to €84.01 before recovering in the evening session to close 0.6% higher than the previous day.
As previously announced, the European Commission released its surrender and compliance dataset this week, providing the latest overview of compliance outcomes for the 2025 reporting period via its Climate Action Portal.
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.