EMISSIONS: EU End of Day Carbon Summary: EUAs/UKAs Fall on EU Gas Dip

EUA Dec25 is trading at its lowest level since 18 Dec 2024, while UKA Dec25 is at its lowest since Jan 27, tracking EU gas price dip on the day.

• EUA DEC 25 down 2.6% at 67 EUR/t CO2e
• UKA DEC 25 down 1.6% at 39 GBP/t CO2e
• TTF Gas APR 25 down 8.8% at 37.875 EUR/MWh
• NBP Gas APR 25 down 7.9% at 92.18 GBp/therm
• Estoxx 50 up 0.1% at 5510
• TTF front month has extended losses to its lowest since November as the market weighs EC recommended flexibility in reaching gas storage targets alongside the risk of renewed Russian gas transits via Ukraine.
• ICE EUA futures maintain a softer tone and a sharp sell-off this week confirms a resumption of the downtrend. The contract has traded through the final retracement of the Dec 17 - Jan 30 bull leg - the 76.4% retracement at €68.88. This strengthens the current bearish theme and signals potential for a move towards the next key support at €64.05, the Dec 17 ‘24 low. On the upside, initial firm resistance to watch is €74.97, the 50-day EMA.
• The latest EU ETS CAP3 auction cleared at €66.58/ton CO2e, down 2.23% compared with the previous EU auction at €68.1/ton CO2e according to EEX.
• The majority of EUA March 2025 call options holders are currently exposed to losses, pressuring them to re-adjust positions with three weeks until expiry.
• UK ETS revenues are expected to lose a sum of £2.9bn from 2025 to 2026 without UKAs prices aligning with EUAs, Institute for Energy Economics and Financial Analysis (IEEFA) said.
• UKAs prices are too low to represent real emissions costs as most of the polluters’ emissions have been covered by free allowances, Institute for Energy Economics and Financial Analysis (IEEFA) said.
• The EU ETS2 price is forecasted to jump from €60/ton CO2e to €149/ton CO2e, between 2027 and 2030, more than doubling within three years amid a sharp reduction allowance supplies and strong demand due to the lack of economical decarbonization options, according to BNEF.