Overview

The mild weather has persisted into Europe’s darkest month, while EUA supply is edging towards meaningful tightening. Hopes of a ceasefire in Ukraine have lifted expectations for improved economic conditions across Europe, adding to the buoyant mood among carbon-market investors.

EUAs rose roughly 3.7% last week, breaking into the €83s on the December contract, which expires on the 15th of this month. The trend has been firmly upward since the April lows of €60, with Friday’s session marking the highest level since the yearly peak just shy of €85 in February.

With TTF natural gas prices decoupling from EUAs in recent weeks, there appears little to pull the carbon market lower—barring broader economic concerns or political realignment. The power market, for now, seems to have loosened its grip on the EU’s flagship decarbonisation policy.