Overview

Last week’s EU carbon market experienced modest fluctuations, reflecting a continuation of the broader consolidation phase observed in early June as the benchmark December contract had several pushes into the high €70s from an opening of €76.62.

EUA futures contracts traded within a relatively narrow range, with limited volatility and subdued directional momentum, eventually closing 0.72% up on the week. This behaviour aligns with prevailing market fundamentals, including balanced supply-demand dynamics and muted energy market signals. Furthermore, signals from within the EU on ETS reform, have been quieter and so prices continue to enjoy structural support through the tightening allowance supply, although short-term price movements remained sensitive to external factors such as natural gas prices and macroeconomic sentiment. That said, activity last week was influenced more by technical positioning and market expectations rather than major policy announcements. With forward curves signalling only gradual price increases over 2026, participants continue to be cautious, contributing to range-bound trading conditions in the spot market.