The European carbon market recorded its strongest daily gain in two weeks on Tuesday. After three consecutive bullish sessions, the EUA Dec ’25 contract climbed 1.63% to close at €81.22, recovering part of the losses seen earlier in the month.
The European carbon market traded on a positive note during the first three sessions of last week. After touching a new ten-month high on Thursday, prices pulled back, ending the week with two consecutive daily declines.
While it remains difficult to predict the exact trajectory of carbon prices, there is broad consensus among analysts that they are likely to rise over the course of 2026. Another area of agreement is the set of factors expected to drive this increase.
The latest ICE Commitment of Traders (CoT) report indicates that investment funds lifted their net-long positions (long-term holdings minus short positions) to 97.5 million allowances at the end of last week—a steep jump from just 1 million the week before.
On Monday, the European Parliament’s Environment Committee (ENVI) adopted its position on the 2040 climate target, largely mirroring the deal reached by EU ministers last week, with 55 votes in favor and 32 against.
After several failed attempts, EUAs finally broke through the €80 level last week, briefly reaching €82.41 — their highest since early February. However, following strong gains at the beginning of the week, the European carbon market surrendered much of those advances toward the end.
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.