Overview

Carbon markets have resumed a stronger correlation with natural gas in the last week following the Alaskan summit between Trump and Putin and subsequent talks between Trump, Zelenskyy and EU leaders. With the outcome of this latest round of diplomacy being uncertain and no end to the war in sight, both EUAs and TTF have recovered from multi-month lows and pushed back towards the top of the recent trading range. Having started the week testing the support levels of €70.50, the benchmark December 25 EUA futures contract has rallied back to breach €72.50 yesterday following strength from natural gas. EUA auction buying this week has also been a little stronger as we near the end of August – not in itself enough to suggest that compliance buying in September will push prices out the top of the recent trading range, but certainly a reminder that the summer holidays are coming to an end.