European carbon prices reversed most of the rally triggered by the EU ETS review proposal, with the Dec’26 EUA contract settling at €81.73 on Tuesday, around €5 below its settlement level a week earlier.
EU climate and environment ministers held their first informal meeting in Dublin last Friday to discuss the European Commission’s proposed reform of the EU Emissions Trading System (ETS), laying bare deep divisions among Member States.
Contrary to expectations, the European carbon market strengthened after the European Commission unveiled its long-awaited EU ETS reform proposals, despite measures that could increase allowance availability later in the decade.
The European Commission on Friday published its long-awaited EU ETS reform package, following a two-day delay. The proposals aim to provide “relief to industry, while preserving the essential role of the ETS in the climate and energy transition, in line with the EU Climate Law.”
Ahead of the European Commission’s 17 July deadline for reviewing the EU Emissions Trading System, Bloomberg has again revealed key elements of the bloc’s proposal before the EU executive’s official announcement, citing people familiar with the matter who requested anonymity because the information is not yet public.
Last week, the European Securities and Markets Authority (ESMA)—the independent EU authority responsible for safeguarding the stability of the EU financial system—published the third edition of its annual carbon market report, covering developments in the EU carbon market during 2025 and the first quarter of 2026.
European carbon allowances traded within a narrow €1 range during Friday’s session. The benchmark contract ultimately settled at €79.20, up just 0.20% on the day, as traders remained cautious ahead of the weekend while awaiting greater regulatory clarity.
Ahead of the publication of the European Commission’s review of the EU Emissions Trading System (EU ETS), now scheduled for 17 July after being postponed from 15 July, reports and media headlines are beginning to shed light on the proposals under consideration.
The latest Commitment of Traders (CoT) report from ICE, released on Wednesday morning, showed that investment funds reduced their net long positions (the difference between long and short positions) after they had reached a four-month high in the previous reporting week.
The European carbon market reversed course during Tuesday’s trading session, giving back all of the strong gains recorded a day earlier. The downturn followed Monday’s rally, when the EUA December 2025 contract settled at its highest level in five months.