The latest Commitment of Traders (CoT) report from the ICE platform shows that, by the end of last week, investment funds expanded their net long holdings (long holdings – short holdings) to a substantial 96.5 million allowances, marking a 3.4% weekly increase.
Following a strong rally that pushed prices to a nine-month peak on Tuesday, the European carbon market eased on Wednesday, with the benchmark EUA Dec’25 contract ending 1% lower and erasing part of the recent sharp gains.
In a Tuesday note, the analysts from Citi Bank reiterated its positive outlook on EUAs for the year ahead, emphasizing that “structural deficits… will persist in the coming years.” According to the report, the European carbon price is expected to reach €95 by February.
On the European carbon market, the week ended with a marginal gain of 0.28%, indicating a continued lack of clear directional momentum. Nevertheless, despite this short-term stability, October closed 3.72% higher, marking the fourth consecutive monthly increase in EUA prices.
According to the International Energy Agency (IEA), natural gas consumption in European OECD countries rose by nearly 9% during the first quarter of 2025, driven by colder weather and lower renewable power generation.
According to a new market forecast from the Dow Jones OPIS analysis team, widely recognized for its energy and carbon market insights, EUA prices are projected to average around €207 by 2034, when free allowances will be fully phased out and the CBAM fully implemented.
As of 24 October, investment funds’ net long positions eased modestly, according to the latest ICE Commitment of Traders report. The data indicate that speculative investors have begun to scale back their bullish exposure to carbon prices, marking the first decline in long positioning this month.
The European carbon market fell behind energy markets on Thursday, slipping to a one-week low despite a sharp rally in oil and gas prices following new sanctions on Russia from both the US and the EU.
Nearly 80 industrial companies “across all sizes and sectors,” representing around half a million employees in Europe, are lobbying for an extension of free allocation under the EU Emissions Trading System (ETS) beyond the current phase-out date, amid the gradual implementation of the Carbon Border Adjustment Mechanism (CBAM).
According to the latest Commitment of Traders report just released by ICE, investment funds participating in the European carbon market raised their net long positions to 94.7 million allowances in the week ending October 17, marking a 4.3% increase compared with the previous week.